Alibaba Group founder Jack Ma and other partners will pay 6.54 billion yuan ($1.05 billion) for a 20 percent stake in China's Wasu Media, Wasu Media said.
Alibaba and Wasu Digital TV Media Group also have signed a cooperation agreement for online content and Internet TV, Wasu Media said in a statement to the Shenzhen Stock Exchange on Tuesday.
The move comes amidst a spate of investments by China's Internet companies, including Alibaba rivals Tencent Holdings and Baidu, as they look to move away from PCs and onto people's smartphone, tablet and Internet TV screens.
"Alibaba and Wasu Group are optimistic about the future development of China's media industry and will support each other in areas such as original content development, video communication, games, music, education, cloud computing, big data, as well as other areas of future exploration and investment in the media industry," Alibaba said on Tuesday.
The agreement extended a partnership on Smart TVs launched on Alibaba's TV operating system last July, Alibaba said.
Wasu Media said it planned to sell the 20 percent stake in a private share placement to Hangzhou Yunxi Investment Partnership Enterprise, which is owned by Ma, Alibaba co-founder Simon Xie and Shi Yuzhu, billionaire founder of Giant Interactive Group.
"Alibaba and Wasu Group are eager to explore additional possibilities for strategic, business, and technological cooperation to meet growing demand in China for more integrated TV, mobile, and Internet services," Alibaba said.
China currently has the world's largest Internet population, and 80 percent of its 618 million Internet users went online via mobile devices as of end-2013, according to the official China Internet Network Information Center.