August 25, 2010 12:45 am

Alibaba makes a second US purchase

Alibaba.com, the top online service matching manufacturers and wholesalers, on Tuesday night announced its second US acquisition this summer as part of a $100m plan to boost its presence in the world’s largest economy.

The company based in Hangzhou, China, paid an undisclosed amount to buy Auctiva, a closely held California company that sells tools to help businesses list their offerings on auction site Ebay.

Auctiva’s profitable model is similar to that of Vendio, another US company that Alibaba bought in June. But Auctiva is larger, processing about $5bn in goods annually versus $2bn at Vendio, said Alibaba chief executive David Wei.

Mr Wei said that there was “still a lot of room” within the $100m he has budgeted for American acquisitions and the US build-out of supplier platform AliExpress.com. “I will spend it as soon as possible” he said in an interview. “We are committed to making this happen.”

Both Vendio and Auctiva will continue to operate as independent brands, but will expand from offering functions including automated listings and shipment insurance to providing connections to suppliers in Asia as well. Other decisions will be left to Auctiva’s seller and chief executive, Jeff Schlicht, who said he would remain at Alibaba.

Mr Wei said both units should help Alibaba reach more Ebay sellers, 90 per cent of whom source their wares offline.

By connecting them to suppliers storefronts on the internet, he said the merchants can get a more reliable stream of goods and save money. In the long term, Mr Wei said his “dream” was to be able to analyse sales trends from merchant data and advise them on what items might be hit products.

Alibaba is publicly traded in Hong Kong and majority-owned by Alibaba Group, which has Yahoo as its largest shareholder. Alibaba Group officials said in May they would like ot buy Yahoo’s stake back, but Mr Wei said the Silicon Valley internet firm hasn’t responded to the overture. People familiar with Yahoo’s thinking said that despite clashes with Alibaba Group’s management, Yahoo would want a large premium on the holding to part with its main asset in the world’s largest internet market.

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