Alibaba gears up for IPO with storming first quarter results

Alibaba, China’s largest e-commerce company, has managed to more than triple its first-quarter profits compared to last year.

With the company currently preparing for an IPO, the announcement provides a welcome boost for the Alibaba hierarchy.

Alibaba said net income rose to $669 million (£440 million) in the three months ended March, a jump from the $220 million (£145 million) posted a year ago.

First-quarter sales at Alibaba also rose an impressive 71 per cent to $1.4 billion (£921 million).

Alibaba, which was formed in 1999 as an online marketplace for Chinese companies, now employs 24,000 people and is still growing, as it continues to acquire smaller companies and add more online services.

Alibaba's storming quarter was also good news for Yahoo, as the struggling US online company has a 24 per cent stake in its Chinese cousin, meaning it gets a windfall every time Alibaba posts its results. Yahoo estimates its stake in Alibaba is worth $8.1 billion (£5.33 billion).

Earlier this week, China's largest Internet search engine company Baidu said it was paying a total of $1.9 billion (£1.25 billion) to acquire a major developer of mobile app stores in China.

The deal will see Baidu take over 91 Wireless, owned by NetDragon Websoft, a company listed in Hong Kong.

The move will allow Baidu to expand on its search offering and better compete against online Chinese rivals Alibaba and Tencent.