Alibaba Group, China's largest e-commerce company, has spent $586 million for an 18-percent share of Sina Weibo, the Chinese equivalent of Twitter, in an attempt to monetize the hugely influential social media platform.

The deal was expected to combine Alibaba's e-commerce strength with Sina Weibo's user base to explore social commerce and develop marketing solutions to merchants.

The two companies said in a statement on April 29 that Alibaba has an option to boost its stake in Sina Weibo to 30 percent.

The transaction put the value of Sina Weibo at $3.26 billion. The market capitalization of Nasdaq-listed Sina Corp. was $3.67 billion on April 29. Sina's American depository shares rose by 9 percent to $55.03 on that day.

Hangzhou-based Alibaba Group, which Yahoo holds about a 23-percent stake, is the largest e-commerce empire in China.

Beijing-based Sina Weibo started as an imitator of Twitter, but it developed features tailored to Chinese users. By November 2012, the number of registered users had exceeded 400 million.

The two companies said the deal is expected to generate approximately $380 million in advertising and revenues from social commerce services for Sina Weibo over the next three years.