NEW YORK ( TheStreet) -- Since Yahoo!'s ( YHOO) initial investment in Alibaba Group Holding in 2005, Alibaba has become the Wall Street darling and Yahoo its aging backer. At the time, Yahoo, which traded mid-day at $39.40, paid a meager $1 billion for a 40% stake in the Chinese upstart, hoping to gain exposure to the blossoming Chinese consumer market.
These days, Alibaba is expected to raise up to $15 billion in its initial public offering, and begin trading on a U.S. exchange this fall.
The IPP would value the Chinese e-commerce giant at around $140 billion. The valuation makes it one of the most anticipated offerings in the technology sector since Facebook's (FB) IPO last June, which raised $16 billion and at the time and valued the company at more than $100 billion.
Alibaba's business model is a mixture of eBay (EBAY) and Amazon.com (AMZN), but with a slight twist. The e-commerce company has always acted as a middleman, unlike Amazon which holds inventory, connects buyers and sellers and facilitates transactions between them. It also is similar to eBay due to its role as a middleman, although it is not an auction-based platform.
While the company is similar to the two U.S. online retail giants, Alibaba's platform handles more goods than both companies combined.
Alibaba's revenues are not spectacular at $1.78 billion, because it does not physically sell any products. Its profitability, however, at $792 million gives the company a 44.6% margin of profit according to Yahoo. This is in stark contrast to companies such as Amazon that fail to make any profit at all on much larger revenues.