Alibaba Could Be the Biggest IPO Ever -- But What the Heck Is It? On the heels of its IPO announcement, we break down the rapidly swelling internet conglomerate that has been called, alternately, the eBay, Amazon and PayPal of China.

By Geoff Weiss

Opinions expressed by Entrepreneur contributors are their own.

For many Americans, the name Ali Baba conjures images of Arabian Nights -- as well as those two timelessly magical words: "Open sesame!' Until yesterday, that is, when Chinese internet conglomerate Alibaba announced plans to file for what may become one of the largest U.S.-based IPOs of all time.

While the news swirled over the weekend, many questions about Alibaba's identity still linger. Here, we provide a glimpse into the diverse businesses operated by the Chinese web giant -- which has been called, alternately, the eBay, Amazon and PayPal of China -- on the heels of its stateside foray:

1. It was founded by a former English professor. Alibaba was founded by a group of 18 people in 1999 led by Jack Ma, a former English teacher from Hangzhou, China. Today, the company employs more than 20,000 people and operates more than 70 offices across the globe.

Related: 5 Things to Consider When Looking for a Manufacturer in China

2. It operates China's largest consumer-to-consumer digital marketplace. The Alibaba-owned Taobao.com has been called the eBay of China, where millions of product listings have accounted for billions of dollars in sales since its founding in 2003. According to alexa.com, Taobao is the third most-visited site in China and the eighth most-visited site in the world. While Taoboa is free to use, merchants can pay to advertise their wares.

3. It has a thriving business-to-consumer arm. If Taobao is the eBay of China, Tmall.com is its Amazon. "Sophisticated" Chinese consumers can purchase popular brands vended on the site, Alibaba said, including UNIQLO, L'Oréal, adidas, P&G, Unilever, Gap, Ray-Ban, Nike and Levi's. A total of 70,000 companies sell their wares on Tmall, which was launched as a component to Taobao in 2008, but became its own entity in 2011.

While Alibaba facilitates various kinds of sales, it does not sell products -- like Amazon, notes The Wall Street Journal, which buys goods from suppliers and then sells them to shoppers. Therefore, while its transaction volume dwarfs that of Amazon and eBay combined, Alibaba boasts far smaller revenues.

Related: Candy Crush CEO: If You Don't Get Why We Are Worth $7.6 Billion, Then Play Our Game

4. It's China's PayPal, too. Launched in 2004 to insure the security of transactions occurring via Taobao and Tmall, Alipay.com is now the most widely used third-party digital payment provider in China. Alipay provides an escrow service whereby funds aren't released to sellers until shoppers have verified their satisfaction with the purchase. Last November, it processed a record-breaking 171.3 million payments in 24 hours.

5. It represents one of Yahoo's largest success stories. In 2005, Alibaba forged a strategic partnership with Yahoo under the tutelage of the company's former chief, Jerry Yang. Alibaba also took over the operations of China Yahoo. Today, Yahoo owns a 24 percent stake in Alibaba, worth an estimated $37 billion, reports Bloomberg. However, as a result of an earlier agreement, Yahoo must sell 10 percent of its shares as soon as the company goes public, said its chief financial officer, Kenneth Goldman.

Related: Walking the Censorship Tightrope, LinkedIn Bets on China

Wavy Line
Geoff Weiss

Former Staff Writer

Geoff Weiss is a former staff writer at Entrepreneur.com.

Editor's Pick

'Catastrophic': Here's What You Should Know About the Debt Ceiling Crisis — And How a Default Could Impact Your Business
Lock
I Helped Grow 4 Unicorns Over 10 Years That Generated $18 Billion in Online Revenues. Here's What I've Learned.
Lock
Want to Break Bad Habits and Supercharge Your Business? Use This Technique.
Lock
Don't Have Any Clients But Need Customer Testimonials? Follow These 3 Tricks To Boost Your Rep.
Why Are Some Wines More Expensive Than Others? A Top Winemaker Gives a Full-Bodied Explanation.

Related Topics

Business News

7 of the 10 Most Expensive Cities to Live in the U.S. Are in One State

A new report by U.S. News found that San Diego is the most expensive city to live in for 2023-2024, followed by Los Angeles. New York City didn't even rank in the top 10.

Money & Finance

3 Ways to Create Multiple (Big) Streams of Income

Here are three ways to create multiple streams of income. These strategies require effort and resources but offer significant financial potential.

Science & Technology

She's Been Coding Since Age 7 and Presented Her Life-Saving App to Tim Cook Last Year. Now 17, She's on Track to Solve Even Bigger Problems.

Angelina Tsuboi, a full-stack mobile and web developer who also happens to be a pilot, has always been solution-oriented.

Diversity

Beyond Marketing — How Brands Can Truly Support the Black Community on Juneteenth

Here are a few authentic ways businesses can support and serve as allies to the Black community on Juneteenth.

Leadership

The Real Reason Why The Return to Office Movement is Failing is Revealed in New Study

There is a vivid sign of the disconnect between employees and their workplace, a glaring indication that companies need to revise their scripts to improve their hybrid and remote work policies.