Alibaba buys Hong Kong’s South China Morning Post newspaper

Chinese e-commerce giant Alibaba says it’s buying Hong Kong’s leading English language newspaper, the South China Morning Post. We believe we can do this because the SCMP, from its base in Hong Kong, is uniquely positioned to report on China with objectivity, depth and insight, a proposition that is in high demand by readers around the English-speaking world – from NY to London to its home in Hong Kong – who care to better understand the world’s second largest economy.

The SCMP Group has other publishing assets that include the local edition of Esquire, Elle, Harper’s Bazaar and Cosmopolitan.

Alibaba Group said late Friday that it signed a deal with publisher SCMP Group to buy the Post and the company’s other media assets, which include magazines, outdoor advertising and digital media. Alibaba shares were down 1% in premarket trade, and have lost 19% of their value in the year so far, while the S&P 500 is down 0.2%. “Some have suggested that ownership by Alibaba will compromise the SCMP’s editorial independence”.

The South China Morning Post is profitable, taking in pages of ads from Hong Kong’s luxury-goods sellers and real- estate developers.

The acquisition is the first move into old media by an otherwise largely digital Alibaba, and in the past weeks numerous questions have been raised as to how the company will manage the iconic century-old publishing property. “Our vision is to expand the SCMP’s readership globally through digital distribution and easier access to content”. The Chinese company also said it will scrap the publication’s Internet pay wall and that editorial decisions will be made “in the newsroom, not in the corporate boardroom”.

In this Monday, Feb. 2, 2015 photo, Alibaba Group Executive Chairman Jack Ma speaks to the media after a speech on “Transforming Dreams into Successful Business” in Hong Kong.

Tsai also addressed the issue of editorial independence in a letter to the newspaper’s readers. Control of the city’s premier English-language broadsheet has been unchanged since media magnate Rupert Murdoch sold most of his stake to Malaysian billionaire Robert Kuok in 1993. SCMP Group’s annual revenue topped one billion Hong Kong dollars (US$129 million) for three straight years through 2014, with adjusted operating profit of HK$167.7 million last year, according to company filings.

The front page of South China Morning Post is flipped by the wind as a vendor sits at her news stand in Hong Kong, Friday, Dec. 11, 2015.