Alibaba May Have to Handle SCMP With Kid Gloves

Alibaba Group last week announced that it has entered an agreement to buy the South China Morning Post and other media assets of SCMP Group.

Terms of the agreement were not disclosed.

Alibaba, which claims to be the world’s largest online and mobile commerce company, said its vision was to provide objective coverage of China to readers around the English-speaking world.

Hard-Hitting Tradition

The South China Morning Post, a Hong Kong-based English language daily, is known for its tough coverage of Beijing despite the mainland government’s frequent attempts to interfere with media coverage. A number of U.S. media and Internet organizations have clashed with the Chinese government’s attempts to muzzle hard-hitting reports.

“The South China Morning Post is unique because it focuses on coverage of China in the English language,” said Joe Tsai, executive vice chairman of Alibaba Group. “This is a proposition that is in high demand by readers around the world who care to understand the world’s second largest economy.”

Alibaba’s plan was to expand the paper’s readership through digital distribution to reach a global audience, he said, and to open up the paywall in order to increase digital readership.

SCMP welcomed the opportunity for Alibaba to increase its investment in the paper’s editorial and business operations, said Robert Hu, chief executive officer of SCMP.

Besides the South China Morning Post, the acquisition includes the magazine, recruitment, outdoor media, events and conferences, education and digital media businesses of SCMP Group. The company’s online presence includes SCMP.com, as well as Chinese websites Nanzao.com and Nanzaozhinan.com. Its portfolio of magazines includes the Hong Kong editions of Esquire, Elle, Cosmopolitan, the PEAK and Harper’s Bazaar.

Hidden Agendas

Alibaba is known to have close ties with China’s central government, which has been ratcheting up its competition with the U.S. for global economic supremacy.

“If I were at the South China Morning Post, I would be very concerned about the sustained ability for free press coverage were the acquisition to go through,” Nucleus Research VP of Research Rebecca Wettemann told the E-Commerce Times.

As for concerns that the acquisition might be an attempt to steer press coverage in a certain direction, Alibaba’s Tsai pledged in a letter to SCMP readers to maintain the publication’s editorial integrity.

“In reporting the news, the SCMP will be objective, accurate and fair,” he noted. “This means having the courage to go against conventional wisdom, and taking care to verify stories, check sources and seek all viewpoints.”

Alibaba Chairman Jack Ma likely is leveraging the paper to increase the influence and brand of his business, asserted Kevin Krewell, principal analyst at Tirias Research.

Ma could be using Jeff Bezos’ acquisition of The Washington Post as a reference point, he suggested.

The paper will have a more pro-China slant under the new structure, Krewell predicted.

“The claims of editorial independence should be considered with a grain of salt,” he told the E-Commerce Times. “Jack Ma has an agenda.”

Alibaba’s interest also may be connected to the Chinese government’s desire for a more sympathetic ear, following the near-economic crisis that briefly rattled global markets earlier this year, mused Charles King, principal analyst at Pund-IT.

“The inspiration for this deal may be entirely financial,” he told the E-Commerce Times, “since Alibaba and other China-based companies listed in the U.S. and other global stock exchanges have suffered due to the Chinese government’s saber rattling and its poor management of the country’s economy.

The paper’s new owners may want to tread lightly on their new acquisition, King suggested, because any short-term attempt to muzzle it may backfire and lead to heightened negative attention from major foreign media outlets.

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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