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June 25, 2010 5:54 am

Alibaba makes first US acquisition

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Alibaba.com, the world’s largest online marketplace for trade between businesses, has taken another step in its global expansion with an agreement to acquire Vendio, a US-based e-commerce site.

The acquisition follows a series of moves by Alibaba over the past two years to transform itself from a China-focused platform offering virtual Yellow Pages-style services into a full-blown global e-commerce player.

The deal is Alibaba’s first US acquisition and the company said on Friday that it was looking for more such opportunities.

“We continue to look for synergies and investment opportunities to grow our customer base, acquire additional technology and add new applications that will help our customer base grow and prosper,” said David Wei, chief executive.

Alibaba changed its fee structure in 2008 and is relying less on relatively high annual membership fees and more on a flexible portfolio of fees for extra services. This has helped the company attract more non-Chinese sellers.

This year, the group set up AliExpress, a web site that not only helps suppliers and buyers find each other but also allows them to conduct transactions online, tying them more closely to Alibaba.

Last month, the group formed a partnership with Softbank, one of its main investors, to link Taobao, its retail e-commerce platform, with Yahoo Japan, which is owned by Softbank.

Alibaba said that buying Vendio should draw more US companies to its services as well as provide an additional platform for its existing customers to sell products online.

Alibaba, which has 658,000 paying members, said the acquisition would give it access to more than 80,000 small businesses in the US with potential sourcing needs.

Vendio helps small- and medium-sized enterprises sell their products through a variety of internet channels including their own online storefront, Amazon, eBay, Google and Shopzilla. It also runs Dealio, a shopping site for consumers.

Alibaba said that the unit would retain its name but that back office functions would be integrated with Alibaba’s. The AliExpress site would be linked to Vendio.

Alibaba and Vendio declined to provide financial details on the deal, but Alibaba said the acquisition was part of a $100m investment plan for this year.

Rothschild was the financial adviser to Alibaba. Pacific Crest Securities advised Vendio. The deal is expected to close next month.

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