UPDATED 13:19 EDT / NOVEMBER 11 2010

Alibaba’s Net Profit Up by 55%, No Deal for Softbank

Chinese B2B platform operator Alibaba has seen a 55% rise in net profit this quarter in comparison to same period  last year.  Thanks to a handsome growth in subscribers – 750,937+ paying members – and Alibaba’s added-value services posing 25% of its revenue and including additional advertising options, the company sees more than just one profitable quarter; additional ones are expected down the light.

Alibaba has been increasing growth efforts all around, spanning various interests for its web portal.  Team growth, product launches and more have been focal points for Alibaba, and it’s affected their bottom line positively for Q3.  As the global market makes its international rounds, Alibaba is finding new relevance in new markets.

“However, he [David Wei, Alibaba CEO] added small Chinese firms, which make up a large part of Alibaba.com’s membership base, face growing pressure from an appreciating yuan and higher raw material and staffing costs. Such pressures could potentially eat into Alibaba’s customer base.”

Despite of this, Wei predicted in the very same interview that he expects solid net profit growth in the next few quarters. He also mentioned that a higher price will be conclusively implemented in 2012 on its international platform, as Alibaba will replace the low-prices membership option for an extended offerings package.

A rise of 130.1 Chinese Yuan in net profit within just one year is something some can only dream of, but that doesn’t mean the architect behind online shopping giant Taobao and Yahoo China is through there. As covered here, some rumor that Alibaba may be interested in acquiring Yahoo; the very same Yahoo that currently owns 38% of the Chinese company.

It’s had larger implications for Alibaba, as investor Softbank’ CEO says it won’t be boosting shares for the company.  Another Softbank-related shocker this week was Vodafone’s stakes sale, as its profits soar.


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