Alibaba Group Holding gains a minority stake and a board seat at Silicon Valley startup Tango to stay competitive in the soaring smartphone world.

Alibaba

The news from the giant e-commerce company in China comes close on the heels of its launch of its IPO process in the U.S.

Alibaba’s flurry of investments

Alibaba’s $280 million investment in Tango was unveiled Thursday amid tech companies across the world scrambling for products that can attract millions of mobile Internet users. In China, Alibaba has been making more of its e-commerce services available on smartphones and tablets by developing apps and even its own mobile OS.

Alibaba has been investing in U.S. Internet companies over the past six months. Some of the investments made include ShopRunner, an online retailer and Quixey, a search engine for apps.

Last month, Facebook Inc (NASDAQ:FB) paid a staggering $19 billion to buy WhatsApp, a company that generated only about $20 million in revenues last year. Many on Wall Street raised eyebrows, and called it a crazy move.

Tango is a very nifty free video chat app, which enables users to send texts, make video and phone calls, and share photos and videos. In addition to the basic functions built into the application, it is even possible to play games with family and friends in real-time while you’re speaking to them. Tango has been praised for its intuitive nature, and works slickly across all smartphones, tablets and PCs.

Competition from WeChat

Last week, China’s Tencent Holdings Ltd (HKG:0700) unveiled plans to buy a 15% stake in JD.com for $215 million to take on rival e-commerce giant Alibaba.com Limited (HKG:1688). As part of the deal, Tencent plans to take another 5% after JD.com’s planned IPO.

Tencent Holdings Ltd is best known for its WeChat messaging service, which boasts over 272 million monthly active users, largely in China.

Alibaba views Tencent as its most serious competitor. Alibaba recently introduced a WeChat competitor called Laiwang, but the service has so far struggled to the extent that Alibaba founder Jack Ma, according to various media reports, urged Alibaba’s entire workforce last year to recruit new users.