From its hip, young campus to its creation of a mobile-operating system, China's e-commerce giant, Alibaba, is taking a page from Google. The WSJ's Juro Osawa tells Yun-Hee Kim what's next for the Chinese company. 

HANGZHOU, China—Alibaba Group Holding Ltd.'s investment in a Chinese social-media giant will likely be instrumental in one of Alibaba's key ambitions: challenging the dominance of Google Inc. GOOG -1.45% 's Android operating system in China's fast-growing smartphone market.
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Alibaba's headquarters in Hangzhou Bloomberg News
Known primarily for its e-commerce heft in China, Alibaba is redesigning its business for the mobile Internet era by stepping up investment in its own smartphone operating system. Its $586 million investment in Sina Corp.'s SINA -3.75% Twitter-like Weibo microblog business on Monday followed a move earlier in April to promote its mobile platform.
"If you are a big Internet company and you are ambitious enough in the mobile space, you have to do more than apps," said Alibaba Chief Strategy Officer Zeng Ming in a recent interview. "Otherwise, you are just a small species in an ecosystem controlled by others."
Alibaba strategy chief Zeng Ming Alibaba Group
Its 18% stake in Sina Weibo, which has 46.2 million daily active users, could enable Alibaba, whose Taobao shopping site has more than 500 million registered users, to have access to vast swaths of data. And having control over the operating system is the best way to gain access to all the mobile-based data, Mr. Zeng said.
"Data on mobile phones are so valuable," he said. "In one way or the other, you can make some money out of it," even though Alibaba is still working on specific ways to do so, he said.
While Alibaba earns money through service and advertisement fees, how to monetize data accumulated through its online services—be it on personal computers or mobile devices—has been a challenge.
The fledgling Alibaba Mobile OS, or AMOS, faces an uphill battle against Android, which, according to research firm IDC, powered more than 80% of all smartphones shipped in China last year. Apple's iOS held around 10%. Alibaba is aiming for a 10% share, even though its current market share is less than 1%, Mr. Zeng said.
Alibaba's OS has become a source of controversy. In September, Google objected to Acer Inc. 2353.TW -2.37% 's plan to sell a smartphone powered by Alibaba's OS. As Acer is part of the Google-led Open Handset Alliance, the U.S. company said that the Taiwanese computer maker couldn't work with a "noncompatible" version of Android. Alibaba rejected the view that its OS was an Android variant, but the Acer phone was never released.
"If quite a few handset companies decide to choose Alibaba's OS, Google will have to be careful in how far they want to push it," even if the handset makers belong to the Open Handset Alliance, Mr. Zeng said. Google declined to comment.
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Screens at Alibaba's Hangzhou, China, office tracked its business last week. Juro Osawa/The Wall Street Journal
Alibaba, founded in 1999, initially became known for its Alibaba.com business-to-business site connecting Chinese suppliers with buyers, but has since expanded with websites for consumers. Taobao is an eBay EBAY -1.33% -like marketplace for small merchants, while Tmall hosts online storefronts for retailers including brands such as Gap Inc. GPS -0.71%
"Weibo could bring a boost to Alibaba's mobile-based businesses," said Canalys analyst Rachel Lashford. The key is how closely they can work together in sharing customer bases and making each other's platforms more attractive, she said.
"The deeper the cooperation, the bigger the benefits."
In April Alibaba announced new steps to promote its OS, through subsidies to handset makers and a one-billion-yuan ($162 million) funding program for app developers. The company is also working with telecommunications operators to make it possible for consumers to buy AMOS-based smartphones without paying deposits or down payments, depending on creditworthiness based on their activities on its e-commerce sites.
One factor that could work in Alibaba's favor: In China, Google faces challenges due to Beijing's restrictions, despite growth in some of its online advertising services. The company has pulled its search service out of mainland China amid disagreements over censorship. In China, many Google services such as Gmail and Google Maps aren't available on Android-based devices, and Chinese users, without access to the Google Play app store, get apps from other local stores. In March, a Chinese government research institute accused Google of using Android's dominance to discriminate against local companies. Google declined to comment on the accusation.
Given the restrictions on Android's services in China, Alibaba could make its OS more competitive by seamlessly integrating Weibo's service and taking advantage of its Alipay affiliate's expertise in mobile payment, Ms. Lashford said.
"You have to compete differently in the mobile space, rather than simply leveraging your strength in the PC-based market," Mr. Zeng said.
Write to Juro Osawa at juro.osawa@dowjones.com