Monday, April 04, 2005

Putting a value on China's Alibaba - The price of buying into China is rising

From MarketWatch: Eyeing China's Alibaba: The price of buying into China is rising

"Alibaba owns two of the largest B2B marketplaces in the world; has a joint-venture partnership with Softbank in a popular Chinese online auction business, called Taobao; and owns a Chinese online payment system, called AliPay. Hmm, sounds like eBay's Asian twin to me. "

"After all, China is a monster opportunity. Sure, the inhabitants may not have the same consumer addictions as the U.S. consumer. Personal consumption in the U.S. is 71 percent of GDP vs. 42 percent in China, according to Morgan Stanley. But there are 1.3 billion people in China, and for better or for worse -- they're on the cusp of becoming the next me-too, want-it-all, consuming society.
Yet for all that opportunity the combined market cap of Chinese Internet companies is a fraction of the U.S. Internet companies. The big three -- Yahoo, Google, eBay - have a combined market cap of $150 billion. The current big three in China -- Shanda, Sina and NetEase -- are worth a combined total of $5 billion, with Shanda accounting for $2.2 billion of that."

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