Should you buy Yahoo as a way into Alibaba?

Alibaba is massive, controlling an estimated 80% of ecommerce in China with 300 million customers and dwarfing Amazon and eBay combined.

The internet giant's revenue climbed 60% to $4.9 billion (£2.96 billion) for the nine months ended September, with net profit of $2.2 billion, according to filings by 24% shareholder Yahoo.

While the market waits with baited breath for the timing of its initial public offering, the company has spent more than $2.7 billion on acquisitions over the last year.

InTime acquisition

This week has seen particular activity with the purchase of a 25% stake in Chinese department store Intime Retail Group for nearly $700 million. Intime owns 36 stores and shopping precincts in China and focuses on high-end luxury brands.

InTime shares subsequently fell as the Chinese e-commerce company purchased it stake at a 7% discount, despite the fact that Intime will benefit from the millions of customers on Alibaba platforms.

For Alibaba, the stake in Intime will allow it to grow into the physical shopping world, integrate online technologies at physical points of sale, access Intime's offline inventory product database, and expand Alipay, the online payment system run by its subsidiary that controls half of China's online payment market.

Earlier this week, the online giant teamed up with Silicon Valley venture capitalist Andreessen Horowitz to invest $250 million into the US ride-share app Lyft, an app company that introduces passengers to drivers using their own cars effectively as taxis, best known for the pink moustache identifying their cars. The funding will help Lyft compete with rapidly expanding rival Uber, whose clients are more corporate in nature.

Alibaba is also investing heavily in financial services, having taken a controlling stake in a indigenous asset management firm, and laying foundations for a private bank. Its latest film and gaming investment scheme, which forecast a 7% return, was fully subscribed in less than one week, but the general concept has been criticised as a way of selling investment plans by the Chinese market.

E-commerce empire

The company's ambitions in finance are huge however, opening up a massive potential market in Alibaba e-credit cards and with an eye on opening up the market for Western investment funds via Alibaba mobile applications. The Chinese regulators are wary of an e-commerce empire running its own financial services and are working up draft regulations to tighten restrictions on internet banking. The state banks have reacted by cutting the amount customers can spend in online payment services.

Alipay could be the engine of growth in the financial services sector as it collects detailed data from customers, and already offers online wealth management products, including China's number one money market fund which has gathered assets by paying interest rates that are nearly double those of traditional banks.

Alibaba has also recently invested $215 million in chat app Tango and purchased stakes in ChinaVision and appliance maker Haier Electronics Group. The group also owns Tmall.com, a major online store in the Amazon model.

The timing of the float will be key. The company planned to raise $10 billion in private funding in May 2012 when Facebook's listing alienated investors. The capital was eventually raised from lenders at the eleventh hour but it is likely to have made Joe Tsai, executive vice chairman of Alibaba, extreme careful about the timing of this pitch.

Listing in New York will allow Alibaba to create a dual-class structure of stocks that would enable senior managers to retain their grip on the company. A market capitalisation of around $250 billion is expected and a minimum of $16 billion of capital could be raised.

Other Chinese internet firms listing in the New York include internet peer JD.com and Weibo Corp in which it has an 18% stake.

Yahoo, which maintains a 24% stake in the Chinese company, will clearly benefit.