Chinese online retail giant Alibaba has struck a deal to buy a $586 million stake in popular Chinese social network site Sina Weibo, raising expectations it will announce a stock market listing.

The news comes as Alibaba, China's biggest online retail company, prepares for a handover of power from founder Jack Ma to executive vice president Lu Zhaoxi.

The purchase from Sina Corp. will see Alibaba take an 18 percent stake in Weibo, a Twitter-like site that claims to have more than 500 million members in China, valuing it at about $3.0 billion.

The firm will also be able to "increase its ownership in Weibo to 30 percent... within a certain period of time in the future", Sina Corp. said on its website, adding that the two sides would cooperate on e-commerce projects.

The deal comes as analysts expect Alibaba, which is based in the eastern city of Hangzhou, to announce an initial public offering (IPO) this year, with some suggesting the company could be valued at more than $100 billion.

"It will add some substance to the pending IPO because they will have... the largest business to consumer trading platform in the world," Francis Lun, chief executive officer of GEO Securities Limited, told AFP.

He was referring to Alibaba's B2C platform made up of Taobao, China's most popular online shopping destination, and Paypal equivalent Alipay.

Taobao had more than 800 million product listings and more than 500 million registered users as of 2012.

"The deal gives Alibaba more access to the growing middle class in China," said Ben Collett, head of Asian equities at Sunrise Brokers.

He told AFP that the timing of the announcement, just over a week before Ma steps aside on May 10 "indicates their listing is a lot more imminent. There's no reason to delay".

Monday's deal would strengthen Alibaba relative to Chinese rival Tencent Holdings, which in the past year has unveiled ambitious plans in the Alibaba-dominated e-commerce business, Dow Jones Newswires said.

It also means firms using the Taobao should be able to target advertisements and deals at the 46.2 million users of Weibo, which is similar to Twitter in China where the US firm is blocked.

Ma announced in March that he would step down as chief executive in favour of Lu, a 13-year veteran of the firm, but retain his post as chairman to provide strategic direction.

The company has made Ma one of China's most wealthy people. Forbes magazine's annual ranking of China's 400 richest put him at 11th with a fortune of $3.4 billion in 2012.

He sold a 43 percent stake in Alibaba to Yahoo! for $1 billion in 2005, but relations between the US Internet pioneer, which later struggled, and China's top e-commerce player were stormy.

In May last year, Yahoo! said it had agreed to sell its stake in Alibaba back to the company for more than $7.0 billion. Alibaba has since completed an initial repurchase of shares from Yahoo! and restructured its relationship.

Stocks in US-traded Sina jumped 10 percent after the deal was announced on Monday.