Ecommerce titan Alibaba goes multimedia with $1.22 billion investment in video site Youku

Alibaba’s smart TV OS in action.

China’s biggest ecommerce company is making a huge investment in the nation’s top video streaming site, it emerged this afternoon. Ecommerce titan Alibaba, along with Yunfeng Capital as an investment partner, is ploughing US$1.22 billion into Youku Tudou (NYSE:YOKU), which runs the Youku and Tudou video sites.

The official announcement from Youku states that Alibaba is paying the equivalent of $30.50 per share, which is a premium over the current $24.14 per share that Youku sits at.

The $1.22 billion deal is the latest in a line of big-buck investments and acquisitions from Alibaba. In 2013, Alibaba took a more social direction by taking stakes in Sina Weibo and taking its messaging app into battle against WeChat.

(See: 9 ways that e-commerce titan Alibaba diversified and went social in 2013)

Battle for the living room

A choice of video apps inside Alibaba’s smart TV OS.

So why Youku? Alibaba’s latest cash-splash is also aimed at being more social, and it additionally gives the eshopping company greater access to consumers on tablets and smart TVs.

Alibaba already has its own smart TV OS (pictured top), so the deal with Youku Tudou will likely allow the firm to strengthen its smart TV content in new ways with the video streaming sites. Neither company has revealed any plans at this stage.

There might also be opportunities for Youku and Tudou to be integrated with online shopping.

Alibaba is plotting its long-awaited IPO to hit US markets, but the firm has yet to file its prospectus publicly with the SEC.