Alibaba IPO Could Create e-Commerce Colossus to Rival Amazon, Google

Chinese e-commerce giant Alibaba on May 6 filed for an initial public offering (IPO) that could deliver it some $20 billion, beating Facebook's (FB) record-breaking $16 billion IPO in May 2012. It also would have a market valuation of about $200 billion—topping rivals Amazon (AMZN) and eBay (EBAY) but still well short of Google (GOOG).

Search giant Yahoo (YHOO), which holds about 23 percent of Alibaba, stands to make a killing from the IPO, particularly if it sells half of its shares as expected. As the San Jose Mercury News detailed, the cash windfall could help Yahoo gobble up even more smaller IT firms than the 22 it swallowed last year, ahead of both Facebook's and Google's hauls.

In documents filed with the U.S. Securities and Exchange Commission (SEC), the Hangzhou, China-based Alibaba did not detail exactly how much money it hopes to raise in its IPO but analysts have pegged the potential haul in the $15 billion to $20 billion range. Analysts do not expect the company to begin trading shares until September at the earliest, and Alibaba is free to begin a roadshow campaign to drum up interest in the company within 21 days of the IPO filing.

The IPO filing supplied information on Alibaba’s financial performance previously available only in an abridged form. For the fiscal year ended March 2013, Alibaba posted $5.55 billion in sales, a 72.4 percent year-over-year increase, and $1.39 billion in profit—a figure that spiked by 105 percent to $2.85 billion in the nine-month period through December 2013.

Alibaba's businesses span online shopping, B2B sales, online payments, shipping, wholesale trade and cloud computing. The sales numbers that follow the company around are overwhelming: Some 80 percent of all Chinese e-commerce transactions go through Alibaba, and last year its retail marketplace processed 11.3 billion orders from 231 million active buyers equating to $248 billion in spending, exceeding eBay’s and Amazon’s total combined transactions.

The Mercury News reported that Alibaba recently invested $215 million in Mountain View, California-based mobile messaging service Tango; headed a $206 million investment into ShopRunner, an online purchase delivery service; and participated in a $250 million funding round for San Francisco-based ride-sharing app Lyft.