Today, Alibaba announced that, the Alibaba Group will invest 5 Billion RMB to Alipay. This is a long-time-investment which will last for 5 years.

Notice that Alibaba Group is not the company named Alibaba.com Limited (HKG:1688), but the mother company of it. Alibaba Group is also the mother company of Taobao and Alipay. However, Alibaba Group has also invested Taobao 5 billion on 2008.

Nowadays, Alipay is the leading company in the 3rd payment service field, and holds nearly 50% market share. So I don’t think this huge investment is for Alipay to expand in China, but to speed up the internationalization process in the world. It’s opponent is now Paypal.

There’s one thing I still wonder: where’s comes the money? From the financial report, Alibaba.com Limited, the most profitable subsidiary of Alibaba Group, earns about 1 billion through a year. Whereas, Alibaba Group is to invest 5 Billion in 5 years. Where can Jack Ma get so much money from?

In the afternoon of September 28 Beijing time, Alibaba(HKG:1688) announced that they will invest RMB 540M (USD 80M ) in HiChina (net.cn) for about 85% share.  And the investment will be settled before the end of 2009 by 2 steps. This is the largest investment to outer companys ever since Alibaba got IPO.

HiHhina is an old IDC in China, which holds a great market share in IDC field. However, HiChina is poor on reputation. Alibaba believes the firm cooperation with HiChina will lead to better service to its customers.

These years, SME (Small & Medium Enterprises) is a growing group, and also a growing market for companys like Alibaba, Baidu, etc. This investment can express the determination to customers of Alibaba, whereas, the poor reputation of HiChina may affect its parent company. In a word, risks and opportunities exist side by side.