Alibaba Can't Wait Any Longer to Go Public

 | Feb 28, 2014 | 10:13 AM EST  | Comments
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You might not be aware of it, because we get sheltered from the news over here in the U.S., but there is a huge Internet war going on in China at the moment  between Tencent and Alibaba.

At the moment, neither of those companies trade their stocks in the U.S.  Tencent only trades in Hong Kong, but it has more than doubled in value in the last year and now has a market cap of more than $140 billion. This has all come from the rapid growth and adoption of its WeChat platform.

WeChat now has almost 400 million, mostly Chinese, users. It's really the 2nd biggest messaging platform in the world behind Facebook's (FB) WhatsApp.  But in terms of monetization, WeChat is miles ahead of WhatsApp.

Tencent has done an incredible job at getting users to not only use the app, but also start buying things and sending money to other users via the app. On the recent Lunar New Year, an astounding number of Chinese people sent money to each other (a tradition for Chinese New Year) via WeChat.

Jack Ma, founder of Alibaba, called it a Pearl Harbor attack on Alibaba in a blog post.

The two companies are in a fierce battle that only looks to be increasing.

Recently, Tencent bought a 20% stake in China's Yelp (YELP), Dianping. It is also rumored to be close to taking a 20% stake in JD.com, which recently filed for an IPO.

Alibaba bought up all of AutoNavi and is rumored to be interested in taking a stake in Japanese WeChat competitor Line.

Just today, Alibaba had a board meeting and Jack Ma sent a letter out to his troops encouraging them to fight against the Tencent threat.

Alibaba has been dragging its feet for months on its IPO. It's been trying to get the Hong Kong Exchange to agree to its demands for board control. I don't think it has the luxury of waiting anymore. It needs to be a public company (or soon to be public company) to make it easier to do large transformational acquisitions to keep up this fight with Tencent.

Of course, if it files for an IPO that should be a big boost to Yahoo! (YHOO) shares.

The other Chinese Internet names should continue to rally if there continues to be strong likelihood of one of these two big Internet giants taking them out.

The space could just be beginning to heat up.

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