Alibaba to acquire AutoNavi in $1.5 billion deal

Summary:The Chinese e-commerce powerhouse already had a 28 percent stake in the mobile-map developer, and has been seeking a full acquisition in order to fold the technology into its platform.

The battle for e-commerce supremacy is heating up in China as Internet giant Alibaba snaps up the mobile-map developer AutoNavi — a long sought deal that Alibaba hopes to parlay into a platform that spans online, mobile and brick-and-mortar retail. 

Alibaba likely has specific intentions on how it will use AutoNavi's mobile-map capabilities. Licenses that allow the mapping of Chinese roads are scant, and AutoNavi holds the keys to one of the few. Alibaba could fold that map muscle into its own platform, giving would-be shoppers directions to nearby stores and sending them mobile ads once they're inside.

China's mushrooming online market has reached 618 million users, 80 percent of which are mobile.

Jonathan Lu, Alibaba CEO said in a statement: 

We are excited to work with the talented team at AutoNavi to further integrate mobile commerce into the lives of our consumers. As a result of this transaction, we believe AutoNavi will continue to be a strong player in an increasingly competitive map applications and local services market.

Alibaba's investment spree this year, which includes purchasing a stake in the messaging app Tango, could be seen as a run-up to its highly anticipated U.S. IPO — expected to be one of the largest ever for an Internet company. 

The AutoNavi transaction is expected to close in Q3 2014. 

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Topics: E-Commerce

About

Natalie Gagliordi is a staff writer for CBS Interactive based in Louisville, Kentucky, covering business technology for ZDNet. She previously worked as the editor of Kiosk Marketplace, an online B2B trade publication that focused on interactive self-service technology, while also contributing to additional websites that covered retail tec... Full Bio

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