• Forbes, Wednesday, November 7, 2007 11:45 AM

Shares of Chinese Web firm Alibaba.com skyrocketed in its first day of trading, opening at more than double the B2B firm's initial public offering price and making it the largest technology debut since Google in 2004. Alibaba's IPO raised $1.5 billion at $1.73 per share; yesterday its stock soared to $4.58 per share and figures to go even higher today. The B2B portal is now trading at 281.5 times its 2007 earnings per share, making it far pricier--pound for pound--than, say, Google, whose shares trade at 58.8 times this year's earnings.

So what does Alibaba.com do? Simply put, the company links small to mid-size manufacturers with overseas buyers, which makes it a popular place for eBay sellers, for example, to buy wholesale goods direct from manufacturers. Clearly, the market sees massive potential for this kind of business. However, one of the key criticisms of the company is the lack of trust between buyers and sellers, who sometimes take the money and run.

Jack Ma, the company's chairman and founder, deflected those concerns, focusing instead on where he would spend the money raised from going public. "I want to turn the company into a leading e-commerce platform for China, Asia and even the world." According to Forbes, the company is looking to expand into Taiwan, Hong Kong, India and Japan. Ma said the company would use 60 percent of its newfound funds for strategic acquisitions.

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