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China's Alibaba seeks blockbuster IPO in US

By Michael Liedtke

Associated Press

Published: Wednesday, May 7 2014 11:45 a.m. MDT

The company was started in 1999 with just $60,000 in the apartment of Jack Ma, a former English school teacher with no previous experience in business or technology.

Alibaba has since blossomed, echoing China's growing economic might, with earnings of $2.9 billion through the first nine months of its last fiscal year ending in March. That topped the combined earnings of $2.4 billion posted for the same April-December stretch by eBay and Amazon.

With Ma at the helm, Alibaba rebuffed a competitive threat after eBay entered China in 2002 and also lined up a Yahoo investment that fortified the Chinese company's position. Ebay abandoned the Chinese market in 2006.

Ma, 49, stepped down as Alibaba's CEO a year ago when he was succeeded by Jonathan Lu. But Ma remains Alibaba's executive chairman and still shapes the company's strategy and entertains customers and employees with songs and jokes when he takes the stage at the company's annual "Alifest." He is also a multibillionaire, based on his stake in the company.

Alibaba's success has also provided a financial crutch for Yahoo, whose stake in the company is the main reason Yahoo's stock price has more than doubled in the past two years.

As big as Alibaba has become in e-commerce, its leadership is far from secure because China's consumers have proven to be extremely fickle as they hop from one trendy service to the next, said Forrester Research analyst Kelland Willis.

She thinks WeChat, a mobile messaging service owned by Alibaba rival Tencent, is already emerging as a potentially formidable threat.

"Consumer behavior could change on a dime," Willis said.

AP Business Writer Joe McDonald in Beijing contributed.

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