This Is What Alibaba, The Company About To Have The Biggest IPO In US History, Looks Like In Person

Chinese Internet company Alibaba is going through the process of an initial public offering at this very moment.

It’s expected to raise more than $US25 billion — making its IPO the largest in US history. When it begins trading tomorrow on the New York Stock Exchange, Alibaba’s market capitalisation will be somewhere around $US166 billion. It may reach $US200 billion by the end of the day.

5,000 current and former employees are going to make about a billion dollars on the sale. Yahoo, which owns a huge chunk of Alibaba, will make something like $US10 billion. Alibaba CEO Jack Ma will become the richest person in China.

But what is Alibaba? How does it make its money? What does it actually look like in person?

Just about a year ago, I flew from to Alibaba’s home city of Hangzhou and took a tour of the company. What I saw and heard those days answered all those questions.

Alibaba is based in Hangzhou, a two-hour flight from my base in Beijing

In China, Hangzhou is best known as a tourist destination, thanks to a beautiful lake called West Lake.

I flew to Hangzhou on a Monday morning.

Hangzhou has 3 million people, making it a small city for China. On the drive from the airport to the campus, I saw a homes like this one.

After a 25-minute drive, I arrived on campus. Check out the cool parking structures out front.

Just like in Silicon Valley, lots of employees come to work on bikes.

As we entered the campus through a shadowed passageway, I wondered what it would look like …

… it turned out to be a huge, massive complex.

There were little trucks ferrying things about.

There were little trams for moving people around, too.

The place was similar to Yahoo's Sunnyvale campus or the Googleplex in Mountain View, except …

… everything felt new …

… or still under construction.

Clearly, the place is growing fast.

I sat with a few executives and learned about the company.

Alibaba's main businesses are Taobao, a site where almost anyone can buy and sell goods …

… and Tmall, where offline brands can set up stores to sell to Chinese consumers.

There are two secrets to its success. The first is that Taobao is entirely free to use. There are no fees for buyers or sellers.

The second is that Alibaba blocks China's most popular search engine, Baidu, from searching Taobao and Tmall.

That means if Chinese consumers want to shop, they start with searches on Taobao and Tmall.

Then, Alibaba monetizes those eyeballs, by selling search ads on Taobao and Tmall.

In a way, Taobao/Tmall is more like Google than eBay or Amazon. (Google makes all its money from commercial searches.)

One big reason Taobao and Tmall are successful is Alibaba's payments service, Alipay. Alipay takes buyers' payments in escrow. Then the goods are shipped. Sellers don't get paid till buyers get their goods. This solves a big trust problem in China.

Alibaba's biggest vulnerability is mobile. Until recently, it was developing mostly for the Web. Now it's building its own mobile OS and all products are mobile first.

In the middle of the campus, there is an estuary with walking paths through it.

We took this one.

In the middle of November, the temperature was in the 70s.

Just like Google with its Android statues, Alibaba has its own corporate mascots all over campus.

Here's one.

Here's another.

When we finally entered a building, we found this Lamborghini replica, built entirely from parts bought on Taobao.

My guide took me to a top floor to get a view of the whole campus.

24,000 people work for Alibaba -- more than Yahoo and Facebook combined.

We went to a room with this big array of monitors, giving live updates on traffic.

Obviously, I don't know what most of the monitors were showing.

Here's a closer look at one, which seemed to show where in China usage was coming from.

These are some of the brands using Tmall to sell goods.

We left the building, and walked through this pleasant courtyard.

Then we went into the middle building seen in this picture.

The floors are so shiny because there was a guy constantly mopping them.

Inside this building, there was a very popular Starbucks.

It looked like any Starbucks in the world.

There was also a gift shop …

… and this florist.

Finally, we saw some Alibaba employees at work. The place was quiet.

On the walls, there were photos from company events -- like the annual wedding ceremony held at Alibaba HQ …

… or scenes from the company's annual employee talent show, held at a local stadium.

Big company-wide events are much more common in China than the U.S.

Here's another shot from the talent show. It's a big deal.

Employees rehearse for weeks.

This is a photo from when Jack Ma stepped down from the CEO job earlier this year.

That was it for my tour of Alibaba. This was my last view of the place.

NOW WATCH: Tech Insider videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.

Tagged In

alibaba features sai-us