No business represents the rapid rise of the Internet in China quite like Alibaba, a company that is part eBay, part Google and part PayPal.
Alibaba is now moving forward with plans for one of the biggest initial public offerings since Facebook’s rocky debut last year — but in New York, not in its home market.
Much is at stake for the Chinese company, and for its prospective advisers and potential investors.
The offering could value Alibaba at more than $75 billion, slightly bigger than eBay and more than twice as large as Yahoo. It is expected to be several orders of magnitude larger than Twitter’s forthcoming public offering, already one of Wall Street’s most anticipated deals.
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Still, Alibaba’s debut will land far away from Hong Kong, where the company had long sought to make its stock listing home. The Internet giant and its executive chairman, Jack Ma, have sought to keep control of the company firmly with its founders, following in the footsteps of Facebook and Google.
But the rules of the Hong Kong Stock Exchange prohibit dual classes of stock and other types of corporate structures that let minority shareholders preserve control of companies. Talks between the two sides over a potential compromise came to a halt Wednesday, according to a person briefed on the matter.
Now come the next steps toward a filing, which may arrive within months. Alibaba has not yet hired underwriters for the stock sale, although for months Wall Street firms have competed for a plum role.
Banks have brought in their most senior deal makers to help make their case. Jamie Dimon, chief executive of JPMorgan Chase, attended a dinner for Ma in Hong Kong this year, for instance.
Still others have pointed to longstanding ties to Alibaba. Credit Suisse and Morgan Stanley, for example, helped the company raise $4 billion in financing last summer.
While companies planning mammoth public offerings can command low underwriting rates — Facebook paid its banks just 1.1 percent of the total proceeds from its stock sale — an Alibaba offering would most likely provide millions of dollars in fees. The Chinese company is expected to raise perhaps $15 billion in its offering.
The frenzy over Alibaba highlights continued excitement over the Chinese Internet space. Much of the landscape remains up for grabs, although companies like the search engine Baidu and the conglomerate Tencent have emerged as big players.
Alibaba has established itself as a behemoth in the business of buying and selling products online. It is made up of several businesses, including Alibaba.com, a website for business-to-business sales; Taobao Marketplace, a giant eBay-like platform; and Alipay, an online payment service.
Ma, a former English teacher turned Internet entrepreneur, founded Alibaba.com in 1999 as a platform for businesses to trade products — like circuit breakers and hydraulic cylinders — with others.
The company eventually moved to more consumer-focused transactions through businesses like Taobao, which let individuals and small companies sell their wares online. Analysts now reckon Taobao commands as much as 90 percent of consumer-to-consumer sales in China.
Later came Tmall.com, a more traditional business-to-consumer platform that has become one of the biggest commercial market places in China. CLSA analysts estimate its share of the business-to-consumer market at 57 percent.
It is one of the most popular ways for foreign companies like Gap, Nike and Samsung to enter the Chinese market, according to Zia Daniell Wigder, a vice president and research director at Forrester Research.
The company has estimated that the gross value of merchandise sold on Taobao and Tmall.com last year exceeded $163 billion.
Alibaba also moved into the online payment space with Alipay, helping allay customers’ concerns about the trustworthiness of sellers. The service is based on an escrow system, where payments are held until the product is delivered.
“They were in early, and they localized heavily for the Chinese market,” Wigder said.
The company’s enormous growth has minted fortunes for its longtime stakeholders, including Ma and Joseph Tsai, the former U.S. corporate lawyer who is Alibaba’s executive vice chairman. This year, Forbes estimated Ma’s net worth at about $3.4 billion, ranking him 11th in its list of Chinese billionaires.
Alibaba’s success has also paid dividends for an investor with whom the company has had a long and tumultuous history: Yahoo. The company took a 40 percent stake in Alibaba eight years ago for about $1 billion.
As Yahoo struggled to compete in its home market, its stake in the Chinese titan accounted for an increasingly large portion of its own market value. Still, the sides butted heads over matters like Alibaba’s decision to spin off Alipay, a dispute that took two years to settle.
Long eager to buy back that 40 percent stake, Alibaba struck an arrangement with Yahoo last year to reclaim those shares. It bought back about half of Yahoo’s holdings for $7.6 billion and can buy back an additional 10 percent after going public.
Yahoo has used that cash to embark on a campaign to reinvent itself, including a series of acquisitions like the $1.1 billion takeover of the social network Tumblr.
But while investors are salivating over a chance to buy a piece of Alibaba, at least one major party appears unhappy.
In a long post on his official blog, the chief executive of Hong Kong Exchanges and Clearing, Charles Li, admitted losing sleep weighing the arguments for and against relaxing the market operator’s rules on corporate governance.
“It is a substantial blow for the Hong Kong stock exchange,” said David Neuville, a partner in the Hong Kong office of the law firm Cadwalader, Wickersham & Taft.