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Bull vs. Bear on the Upcoming Alibaba IPO

NEW YORK (TheStreet) -- The news Friday that Alibaba will be filing its documents very soon to hold an initial public offering in New York is a big deal.

When that filing happens -- and it could be in a matter of days -- the company will reveal details about itself that many in the investing world have been dying to see for well over two years.

The company always seem to be compared to Amazon (AMZN) and yet it is bound to show that it is much more profitable than Jeff Bezos' company. It will also show that it has its fingers in many more businesses with longer-term growth potential in China.

People will also see a business that's much larger than Facebook (FB) in many ways.

So how should investors value it?

Over the coming weeks after an Alibaba IPO filing, you will likely hear two sides debating the merits of the value of the company in an IPO.

On the bull side, you will hear people make several points about why Alibaba is so big and significant:

Size. Alibaba's got its tentacles into all aspects of Chinese society will its Taobao service for consumer-to-consumer, its Tmall for business-to-consumer and its Alipay for payment systems. Not only are they selling a lot of stuff already but it's likely to dramatically increase in the coming years.

Profitability. American internet companies are accustomed to showing strong revenue numbers when they IPO but not profits. They promise that the profits will come shortly. Sometimes they do, sometimes they don't. But with Alibaba the profits are already here. This is why how people value the deal will be so interesting. Does it deserve the same valuation as Facebook because its revenues are the same? But if it's so much more profitable than Facebook, isn't it worth more?

The continued growth of Chinese consumers. In terms of revenue trajectory, there's no better place to be than a dominant player with the Chinese consumer, ready to ride that wave of increased buying power they will enjoy.

The ability to grow internationally. Many Americans only think about Alibaba as a China play. The reality is it has much broader ambitions, including taking its Web sites around the world. It will look to first sell to Chinese in those countries and then expand from there.

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