Alibaba Can Learn From Snapchat's Mobile Platform, Says Morningstar

Speaking to Benzinga, Morningstar Analyst RJ Hottovy discussed the Alibaba Group Holding Ltd BABA investment in Snapchat.

Hottovy felt that what had driven the decision was Alibaba's commitment to its own mobile platform and the ability to learn from Snapchat's platform. The analyst did not think the deal signaled an aggressive expansion in the U.S. for Alibaba.

The company may be interested in "learning about the different technologies that could help them enhance their own mobile platform," Hottovy said.

The analyst added that Alibaba had become "serial acquirers, taking stakes in small businesses," which would allow the company have positions in multiple emerging technologies and a stake in whatever becomes the dominant standard.

Related Link: Wedbush On Alibaba-Snapchat: Makes More Sense Than It Initially Looks

Hottovy concluded that it was a relatively small investment and that if it could improve Alibaba's ecosystem then it would be "a worthwhile investment" for the company.

Alibaba closed at $81.92, down 0.09 percent.

Kevin Riley and Brianna Valleskey contributed to this report.