China's Tencent Holdings Limited, Asia's largest Internet company, has agreed to pay US $736 million for a 19.9 percent stake in 58.com, a Chinese classified ads similar to Craigslist.

The purchase, experts and analysts said, is part of Tencent's intensified efforts to expand its online content as it seeks to go head-to-head with rival Alibaba Group Holding Ltd, China's e-commerce giant.

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Tencent, which is the fourth-largest Internet company in the world after Google, Amazon, and Ebay, said it will purchase 36.8 million Class A and B ordinary shares in the Nasdaq-listed 58.com, valued at US $20 a piece.

Tencent's investment in 58.com comes just a few weeks after Alibaba acquired mobile-browser company UCWeb.

Both Tencent and 58.com said the US $736-million investment will allow Tencent to expand its choice of local services and merchants available to users while 58.com will be able to increase its user base through the traffic from Tencent's QQ and WeChat messaging services.

58.com said it will use the proceeds of the investment from Tencent to buyback some shares from its pre-IPO investors.

News about Tencent's purchase of 19.9 percent stake in 58.com immediately sent its shares to HK $119, the highest since 12 March, as investors scramble to take advantage of Tencent's rise.

Early in March, Tencent bought a 15 percent stake in JD.com and 20 percent in Dianping, as part of its effort to build a stronger competition to Alibaba. Both Tencent, which is focused on online games and social networks, and Alibaba are expanding rapidly through acquisitions and alliances.

Tencent and Alibaba have been finding ways to further win customers in China's vast and rapidly growing online business marketplace. Alibaba recently announced that it has chosen to list its shares at the New York Stock Exchange.

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