Chinese e-commerce giant Alibaba Group has announced that the group will consolidate its two companies, Taobao.com and Alimama.com.

The new company will be managed under the brand of Taobao and Taobao's president Lu Zhaoxi will be the president of the new company while Wu Yonnming, general manager of Alimama, will be a senior manager of the new company.

Jack Ma, chairman of the board of directors of Alibaba, reportedly revealed the cooperation details in an internal email and he says that after five years of effort, online auction website Taobao.com has achieved a balance between expenditure and income, relying on its advertising revenue in August 2008.

Over the past five years, Taobao.com has developed into one of the biggest comprehensive shopping websites in Asia with 80 million users and a daily transaction value of over CNY300 million. In the first quarter of 2008, the total transaction value of Taobao.com increased by 170% to CNY18.8 billion and its market share in China's Internet shopping and C2C sectors reached 79% and 84%, respectively, according to the statistics.

The merger of Taobao.com with Alimama.com will take advantage of the two companies' strengths. The traffic of Alimama.com will provide Taobao's contracted sellers with an efficient online promotion service and bring them more business opportunities, in addition to bringing diversified user groups to Taobao.com. Meanwhile, combining with Alimama.com, Taobao.com will further explore the value of its traffic and offer help the survival and development of millions of small and medium-size websites. In addition, more netizens can visit Taobao.com through the channel of Alimama.com in the future and Taobao.com will offer safer, more comfortable and more thoughtful services to China's online shopping consumers.