So, the question is, how are Taobao and Alipay doing. Even though they’re private now, the Microsoft board would have wanted to know their likely valuation if/when they do go public, as I’m sure they judge their past investment in Facebook at a $15 billion valuation. Based on my research, I think next year’s (2012) Taobao revenues will be $3.6 billion with a 28% net profit margin. I assume Taobao would get at least a 12x price-to-sales ratio if it IPO’ed today, meaning the market would say it (including Tmall) is worth $43 billion.
I assume Alipay will do $1.75 billion in revenues next year at a 30% net profit margin. I think it would get a 10x price-to-sales ratio if it were to IPO which would yield a market capitalization of $17 billion. Therefore, combined, Alipay and Taobao would be worth $60 billion today as public companies.
Yahoo!’s 40% stake in the group would be worth $24 billion or $18.35 per share.