Look beyond the headline figure and Alibaba Group Holding Ltd.'s massive bump in research and development spending is actually quite tame.
China's biggest e-commerce company plans to boost expenditure to $15 billion over the next three years, it said Wednesday. In making the announcement, the House that Jack Built has coined the term DAMO: discovery, adventure, momentum and outlook. It'll set up a new research academy bearing that moniker with labs in China, the U.S., Russia, Israel and Singapore.
That dollar number certainly looks huge and equates to roughly doubling R&D over two years. Relative to sales, though, the company is simply keeping spending in line with where it's been for the past couple of years at a little over 10 percent. That's because revenue next year is also expected to double compared with 2016.
By this measure, Alibaba has been quite a way behind both Facebook Inc. and Alphabet Inc. (aka Google) for the past few years, and even slightly adrift of Amazon.com Inc.
Alibaba said the new academy aims to "increase technological collaboration worldwide, advance the development of cutting-edge technology and strive to make the world more inclusive by narrowing the technology gap."
That statement has all the right terminology for a company hoping to be a global technology contender. Readers playing catchword bingo would be jumping out of their chairs.
But don't be fooled by that $15 billion figure. The company would have spent as much anyway without all the song and dance. In reality, if Jack Ma truly wants Alibaba to make a splash, he'll need to be a lot more extravagant.
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