Alibaba vs. Google: Showdown in Asia?

Nov. 7, 2007 — -- On Tuesday, Alibaba.com, the second-biggest Internet company in Asia just behind Yahoo Japan, debuted on the Hong Kong stock market to spectacular demand. In a matter of hours, the e-commerce site's stock tripled in price and immediately chatter began.

Some analysts called the stock overpriced, while a few media reports compared Alibaba to another hot tech company -- Google.

During its IPO, Alibaba.com sold 858.9 million shares and raised $1.5 billion. It was the biggest IPO by a Chinese Internet company and roughly matches Google's $1.66 billion debut in 2004.

But tech industry analysts point out that while Alibaba and regional Web leaders may expose Google's weaknesses, the site doesn't pose a significant threat to Google.

Alibaba's business is quite different from Google's, Todd Greenwald, an analyst at Nollenberger Capital Partners, told ABCNEWS.com.

Alibaba, despite its similar position as an Internet leader, is an e-commerce site, not a search site, like Google. Alibaba allows smaller Asian manufacturers to connect with people who need their products. Users can input a product they're looking for and Alibaba connects them to sellers.

The most basic level of the site is free, but for a fee, more personalized, advanced services can be had.

"Alibaba is much more focused on e-commerce and portals in China," said Greenwald. "If there's a threat to [Google], it's Baidu.com. Google's the No. 2 search portal in China and is really battling it out with Baidu," a search engine.

But the ambitions of Alibaba's founder, Jack Ma, are big.

"I want to turn the company into a leading e-commerce platform for China, Asia and even the world," Ma told reporters on Monday.

Similarly, two years ago, Ma threw down the gauntlet to Google and other search sites.

"We will use all the resources we have to focus on search in the next two to three years in China. ...We already won (over) eBay. We already bought Yahoo! and the money is to stop Google," Ma reportedly told journalists in 2005. Yahoo! now has a 40 percent interest in Alibaba.