Marketing Pilgrim

Alibaba, the Chinese eCommerce firm, first began making waves last month when their IPO was larger than Google’s. In the IPO, Alibaba raised $1.49 billion on just under 860 million shares (Google raised $1.66 billion in its 1.6-million-share IPO).

Today its public trading begins and the stock price continues to climb: it’s up nearly 300% from its IPO price. This gain is even more remarkable in light of the “see-sawing” general market trend. The higher stock price (closing at 39.50 in Hong Kong dollars yesterday; about US$12.50) pushes Alibaba’s valuation to US$25.6 billion, according to Reuters.

Fueled by massive hype, Alibaba has become the latest dotcom sensation—but it is just evidence of yet another bubble?

Unlike many other highly-valued companies (i.e. Facebook, before today’s announcement), however, Alibaba is fully monetized—and is an actual “business” (as opposed to just a cool website). However, even that may not save them from being overhyped and overvalued: the $1.49B IPO pushed its valuation to 106 times its projected earnings for 2007. Now it’s reached 316 times its projected earnings this year.

Will Alibaba become the victim of its own hype, or is it setting a new standard for Internet entrepreneurship in China—and the rest of the world?