Simpson Thacher & Bartlett and Shearman & Sterling have the lead roles in Chinese e-commerce giant Alibaba Group Holding Ltd.’s $586 million investment in the Twitter-like microblog service Weibo.

Alibaba will acquire an 18 percent stake in Weibo, a subsidiary of U.S.-listed Chinese Internet portal company Sina Corp., with the option to boost its interest to 30 percent "at a mutually agreed valuation within a certain period of time in the future," according to a Sina statement.
 
Simpson Thacher Hong Kong partner Kathryn Sudol acted for Alibaba on the deal, working with the general counsel Timothy Steinert. Fangda Partners Shanghai partner Jonathan Zhou represented Alibaba on Chinese law issues. Walkers Hong Kong partner Denise Wong acted as Cayman Islands counsel to the company.*
 
Shearman Beijing partner Lee Edwards led the team advising Sina.
 
The two companies plan to connect merchants on Alibaba’s Taobao and Tmall online markets to Weibo’s over 500 million users, while also cooperating in the areas of user account connectivity, data exchange, online payments, and online marketing. As a result, Weibo is expected to generate $380 million in advertising and what it called "social commerce services" revenues over the next three years, according to the statement.
 
"Together we provide a unique proposition not only to existing online merchants, but also to individuals or businesses, who wish to offer products and services on social networking platform to take advantage of the traffic shift toward social and mobile Internet," Sina chairman and CEO Charles Chao said.

Weibo is both a brand owned by Sina and a generic term for a microblog. Though Sina operates the largest such service in China, competitor Tencent Holdings has its own weibo offering. Like Twitter, which is blocked in China, weibos have become a significant outlet for commentary and news about breaking events.
 
Email: tbrennan@alm.com .

Update, 5/10/13: This story has been updated to include Walkers Hong Kong partner Densie Wong as Cayman Islands counsel to Alibaba.