China's Alibaba group merges 2 fast-growing units

BEIJING, Sept 4 (Reuters) - Alibaba Group, the parent of China's largest e-commerce firm Alibaba.com Inc (1688.HK: Quote, Profile, Research, Stock Buzz), said on Thursday it was combining the operations of two of its fastest-growing units to achieve further synergies.

The combination of Alimama.com, an online advertising service, and Taobao, an auction site, will attract more merchants and give consumers more choice, the group said in a statement.

"There is a lot of synergy between the two businesses that can be unleashed," group Chairman Jack Ma said in the statement, which did not provide details on any cost savings.

Both Alimama, launched in June, and Taobao, running for five years, are free services.

The announcement comes after Alibaba.com posted a 159 percent rise in second quarter net profit, while warning that prospects were darkening as global woes caused small and medium sized firms to cut spending.

U.S. Internet company Yahoo (YHOO.O: Quote, Profile, Research, Stock Buzz) is a key investor in Alibaba.com. ($=6.85 yuan) (Reporting by Kirby Chien, editing by Will Waterman)