A Study On The Profit Model Of Internet Companies With Alibaba As An Example

With the new generation of Information Technology becoming more mature and the exceptionally fast development of Internet,it is playing an increasingly important role in obtaining extensive information,promoting interoersonal communication and providing convenient living.People’s lives are more and more inseparable from it.As of December 2016,the number of netizens in China had reached 731 million,whereas the Internet penetration rate reached 53.2%,surpassing the global average by 3.1%,and the Asian average by 7.6%.In this background,there are new companies that constantly enter the Internet industry.Compared with many veteran companies,the growth of these new Internet firms has been ten times faster,and even hundreds times faster.This is why many people have started to explore the profit model of these internet companies.Alibaba has developed along many other Internet companies.Its unique and advanced profit model is also useful to study Chinese Internet businesses.On April 6,2016,Alibaba successfully listed in the United States,it had become the largest retail trading platform and a leading e-commerce business in China and around the world.This paper explores the main Alibaba’s profit model and evaluates it from a financial point of view.It also explores the prospect and margin for improvement of Alibaba’s profit model and looks forward to establish and perfect it,both for Alibaba and other Internet companies.