In First Post-IPO Deal, Alibaba Goes For Hotel Technology

In its first major deal after its record-breaking $25 billion IPO this month, Alibaba Group Holding has dropped almost a half-billion-dollars to buy a chunk of a Beijing firm that delivers technology services to hotels.

The $457 million investment to control 15 percent of Beijing Shiji Information Technology is looking to support the infrastructure of its home-away-from-home for business travelers and vacationers.

Also, “the alliance with Beijing Shiji could help Alibaba’s travel-booking business. Alibaba, whose Taobao and Tmall online marketplaces attract millions of shoppers, also runs a travel-booking service called Taobao Travel, which allows users to book plane tickets, hotels and package tours,” The Wall Street Journal reported.

As part of its online to offline strategy, the move helps Alibaba control what people see and can interact with throughout the region.

“The deal with Beijing Shiji, whose clients include hotels across China, also fits into Alibaba’s strategy of connecting its online and mobile services with bricks-and-mortar businesses,” the Journal said. “Through its mobile applications, Alibaba already allows users to pay for meals at restaurants, taxi rides and various other offline services, using the electronic payment system developed by the Alipay affiliate.”