Report: Alibaba planning Android, iOS competitor

The company will reportedly offer its smartphone operating system in China first, but there is a possibility that it could be released elsewhere eventually.

There might soon be another company competing in the mobile operating system market, The Wall Street Journal is reporting.

China-based online-commerce company Alibaba is planning to launch a mobile operating system in the third quarter, the Journal says, citing someone "close to the situation." The operating system will reportedly have cloud-based elements, including allowing users to access applications over the Web, rather than download them to their devices.

The fact that Alibaba is considering launching a mobile operating system is somewhat surprising. Though the company has developed some software in the past, it's best-known as an e-commerce site in China.

As of late, Alibaba has been mired in controversy. In February, the company announced that CEO David Wei and COO Elviis Lee Shi-Huei resigned following an internal investigation that revealed increased fraudulent activity on its Web site. According to Alibaba, the executives were not involved in the fraud, but they were taking the blame for the "systemic breakdown" in the firm's "culture of integrity."

Yahoo, a 43 percent owner of the Alibaba Group, became embroiled in some controversy earlier this year when the online giant disclosed to investors that Alibaba no longer controlled Alipay, a Chinese PayPal-like company. Yahoo reportedly knew of the issue in March, but hadn't disclosed it until May.

In May, Yahoo CEO Carol Bartz was grilled by analysts who criticized her company's handling of the Alipay situation. For her part, Bartz said that her company did no wrong, and its "disclosure was timely and appropriate."

With its upcoming mobile operating system, Alibaba will be taking on entrenched competitors in the space, including Android, Apple's iOS platform, and the Symbian operating system. Symbian secured nearly 60 percent of the Chinese mobile market during the first quarter, according to research firm Analysys.

According to the Journal, Alibaba plans to bring its operating system to China first, but a person familiar with the matter told the Journal that it could "eventually" launch its OS outside of China.

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