Alibaba.com Stock Price Dived 85%

HANGZHOU, Oct 14, 2008 (SinoCast China IT Watch via COMTEX) -- EBAY Quote Chart News PowerRating -- The world's top online shopping Web site eBay Inc. (Nasdaq: EBAY Quote Chart News PowerRating) announced a job cutting of 1,600 employees on October 6, 2008. Meanwhile, Chinese e-commerce leader Alibaba Group started a worldwide recruitment. Only a day later, Alibaba declared that CNY 5 billion would be inputted into affiliated C2C site Taobao.com in the future five years.

However, the stock price of Alibaba's B2B affiliate Alibaba.com Ltd. (SEHK: 1688) went down all the way, and closed at HKD 5.75 on October 9, diving 85% from the peak price of a year ago.
An unknown insider points out Alibaba's recruitment plan is to hide its real intention to reduce the stafftrimmer.

On September 22, an Internet user posted an article at his blog, saying that he was notified of news that Alibaba will cut more jobs after the National Day holiday, including veterans who have worked at the company for a long time.

Previously, on September 4, Alibaba suddenly announced a merger of website ads trade market Alimama into Taobao.com, shortly after which Alimama's 600-people team was largely reduced. The layoff seems to prove the former saying of Jack Ma, founder, board chairman, CEO of Alibaba Group, and board chairman of Alibaba.com, that an Internet winter is coming in China.
At the end of September, Alibaba posted the newest job listings on its site, recruiting talents engaged in sales, technology, and other fields. The recruitment will last from the fourth quarter of 2008 to July of 2009, revealed Peng Lei, chief human resources officer of Alibaba.

The winter in the IT industry caused the stock price drop and market cap shrink of Alibaba.com. Analysts reach consensus that Alibaba's recession was attributable to Chinese Yuan appreciation, energy and raw material markup, credit crunch, capital market downturn, and recent financial crisis in the US, which forced the company's B2B customers to lessen inputs in Internet promotions.

Alibaba has taken actions to consolidate affiliated resources through the mergers of Alimama into Taobao.com and China Yahoo into daily life information site Koubei.com. However, the whole market largely dragged down the company's performance, commented both Essence Securities Co., Ltd. and Nomura Securities Co., Ltd.

Not only Alibaba, but also other Internet companies, are all busy launching recruitment plans, including NetEase.com Inc. (Nasdaq: NTES), Baidu.com Inc. (Nasdaq: BIDU), and Tencent Holdings Limited (SEHK: 0700), even online game giant Shanda Interactive Entertainment Ltd. (Nasdaq: SNDA), which hold job fairs one after another at universities and colleges.

Meanwhile, foreign IT companies are carrying out layoffs. Besides eBay, Sun Microsystems Inc. and Nortel Networks Corporation (TSX: NT and NYSE: NT) respectively cut 2,500 and 2,100 jobs in the past year. HP, to acquire Electronic Data Systems (EDS), needs to reduce 25,000 posts, and Google Inc. (Nasdaq: GOOG) cut 300 jobs for Internet advertising site DoubleClick.