Alibaba Group, China's largest e-commerce company, on June 11 announced it will purchase UCWeb, a provider of mobile Internet software and services. Although the two sides did not reveal the value of the deal, the merger is expected to be the largest in China's Internet business history.

Alibaba currently holds 66 percent of UCWeb's stake with a total investment worth $686 million.

UCWeb board chairman Yu Yongfu, who will act as president of Alibaba's future UC mobile platform, said the valuation of the Alibaba-UCWeb merger far exceeds the one set by Baidu, China's most popular search engine, which purchased 91 Wireless for $1.9 billion last July.

Alibaba founder and Chairman Jack Ma said that the merger deal was agreed on because both Alibaba and UCWeb believe that the information technology era is being replaced by an age of "data technology."

The merger is expected to present a challenge to Baidu, as UCWeb's UC Browser is the world's most popular mobile browser, boasting 5 million users. Founded in 2004, the company was one of China's earliest Internet firms to specialize in mobile services.