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Will Success Spoil Alibaba?

Stocks in this article: YHOO AMZN EBAY GRPN PCLN

NEW YORK (TheStreet) -- In all the hubbub over the coming Alibaba IPO, one question is not being asked.

Will this be its ruin?

Right now, Alibaba seems to have the huge Chinese market to itself. It has been growing quickly in the absence of competition.

That's over.

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Right now, Alibaba can move without interference, except from the Chinese government, which ended its move into mobile payments last week, then announced it would be one of 10 companies setting up private banks.

The days of moving with minimal interference are also over.

Now everyone with a keyboard can look over executive chairman Jack Ma's shoulder and question his moves. Now the bull vs. bear debate can begin in earnest

Once the IPO is set, and Alibaba's S-1 is issued, we should know the real value of Yahoo! (YHOO), which has doubled under CEO Marissa Mayer because it still owns a big stake of Alibaba. Yahoo closed Friday trading at $37.60, and as of 9 a.m. today is in premarket trading at $39.10, up 3.99% from Friday.

But expect a lid to go on Yahoo!'s valuation once the IPO is complete.

The fact that Alibaba is listing in New York rather than Hong Kong will be applauded, but should it be? Alibaba's listing is coming here, apparently, because U.S. laws are now less stringent than China's when it comes to corporate democracy. We've grown used to founders (like those of Google (GOOG) and News Corp. (NWS)) having multiple classes of stock to retain control. Hong Kong, it seems, is more democratic.

Alibaba is currently expected to go public in the third quarter, through a collection of investment banks, with a roughly $15 billion flotation that values the company at about $100 billion. The company claims to control 80% of China's e-commerce market

As it prepares to go public, Alibaba seems frantic to cover every niche in its home market that it can. Its pending takeover of ChinaVision Media Group, at a discount, gives it something like Amazon (AMZN) Prime and GameTap.

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