After FB, Alibaba Invests In Mobile Messaging App

by CXOtoday News Desk    Mar 20, 2014

alibaba

The mobile messaging space is becoming increasingly exciting. Less than a month after Facebook bought WhatsApp for $19 billion, Chinese online retail giant Alibaba has jumped into the messaging market with a $215 million investment in Tango, a four-year-old messaging and social-networking app, according to multiple reports.

Alibaba invested $215 million while the remainder of the funding came from Tango’s prior investors, which include Access Industries, Draper Fisher Jurvetson and Jerry Yang, a co-founder of Yahoo, says a Reuters report.

Tango originally started as a free video-calling service, but has recently expanded into social networking, gaming and streaming music through a deal with Spotify. With over 200 million users, the app operates over 3G, 4G and Wi-Fi networks. The company, which has offices in California, Beijing and Texas, was introduced to Alibaba in 2005 led Yahoo’s investment in the Chinese company.

Alibaba, which views Chinese rival Tencent as its most serious competitor, has long recognized the threat posed by Tencent Holding’s WeChat, a massively popular messaging app that has slowly morphed into an e-commerce platform. Alibaba recently introduced a WeChat competitor called Laiwang, but it was reported to be a struggling company, as per an Economic Times report.

Read: Will WhatsApp Acquisition Help FB Expand In India?

 “Tango has exhibited tremendous growth because of its unique approach to combine free communications, social and content,” Joe Tsai, executive vice chairman of Alibaba Group, said in a statement adding that Tango has a disruptive way of looking at the mobile and messaging opportunity, making it a key differentiator in the market.

Analysts believe that while messaging apps such as Tango and WhatsApp are not household names in the U.S., they have found a tremendous user base in countries that are witnessing rapid smartphone growth, including India, China and Brazil. Users in these countries find messaging a quick and cost-effective way to communicate.