Alibaba’s South China Morning Post Purchase Puts Focus On News Coverage

Chinese e-commerce boss Jack Ma is emulating America's Amazon.com boss Jeff Bezos, who recently purchased The Washington Post, by purchasing his own media empire in Hong Kong, the South China Morning Post.

Alibaba Group Holding Limited says it has entered into a definite agreement to acquire the South China Morning Post and other media assets of Hong Kong-listed SCMP Group Limited.

"The South China Morning Post is unique because it focuses on coverage of China in the English language. This is a proposition that is in high demand by readers around the world who care to understand the world's second largest economy," said Joe Tsai, executive vice chairman of Alibaba Group. "Our vision is to expand the SCMP's readership globally through digital distribution and easier access to content."

"With proven expertise especially in mobile Internet, Alibaba is in an excellent position to leverage technology to create content more efficiently and reach a global audience," said Robin Hu, Chief Executive Officer of SCMP. "We welcome Alibaba's commitment to invest additional resources in its editorial and business operations to make the SCMP even stronger."

Apart from the flagship South China Morning Post newspaper, the agreement includes the acquisition of the magazine, recruitment, outdoor media, events & conferences, education and digital media businesses of SCMP Group Limited. Besides the broadsheet, other SCMP titles include the Sunday Morning Post, its digital platforms SCMP.com and related mobile apps, and the two Chinese websites Nanzao.com and Nanzaozhinan.com. The acquisition also includes a portfolio of magazine titles including the Hong Kong editions of Esquire, Elle, Cosmopolitan, The PEAK and Harper's Bazaar.

In America, Amazon.com founder Jeff bezos purchased The Washington Post Company's flagship newspaper for USD250 million in August 2013. And earlier this year in June, Alibaba bought an undisclosed stake in the Shanghai-based China Business News for USD194 million.

Tsai reassured the public in a separate letter addressed to "readers" by stating: "So, you're probably wondering why. Why is Alibaba buying into traditional media, considered by some a sunset industry? The simple answer is that we don't see it that way.

The SCMP has iconic status in the region, with a strong reputation internationally for the quality and credibility of its journalism over the years, thanks to its reporters and editors who have worked hard to build this heritage. Like many print media, however, the SCMP faces challenges amid the dramatic changes in the way news is reported and distributed. But these changes play to Alibaba's strengths, which is why we believe the two companies complement each other well.

We see a compelling business case for the acquisition because we believe that Alibaba is best positioned to take the SCMP to the next level. The foundation for this work must be the quality of the content. And what underpins this will be editorial excellence: a clear pre-requisite to maintaining readers' trust and, ultimately, achieving commercial success. Be assured, we get that."

But most media watchers are probably worried about the Chinese companies influence on the seemingly-objective coverage of the SCMP. Alibaba is beholden to the Chinese government, and those constraints may pass through to SCMP. Journalists and lawyers are frequently jailed in China for ridiculous reasons, and sometimes for no reason at all.

So Jack Ma's stewardship of the SCMP may throw into confusion the West's view of him as a businessman-only. Now he is a steward of covering both good and bad news about the Chinese government and even his own businesses. Jack Ma recently won the esteemed Asia Society Game Changer Award, and Ma's control of SCMP's assets may void the optimism of Asia Society's award.

Tsai sought to address these concerns by stating, "In reporting the news, the SCMP will be objective, accurate and fair. This means having the courage to go against conventional wisdom, and taking care to verify stories, check sources and seek all viewpoints. These day-to-day editorial decisions will be driven by editors in the newsroom, not in the corporate boardroom."

In China, the government is the primary stakeholder in any enterprise. The government is more important than investors, customers, and staff — the government and its policies are the key influence in any large business in China. So Tsai's words and Ma's actions will ring hollow and their investments in these great brands will be useless if the company fails to uphold objective news reporting.