Alibaba to list in Hong Kong?

Alibaba.com, China's biggest business-to-business online firm, will be listed on the Hong Kong Stock Exchange, a source said.

Its parent company, Alibaba group, of which 40 percent is owned by Yahoo Inc., has chosen Hong Kong because it is a global trading and financial center, the source said. Alibaba.com matches buyers and manufacturers over the internet and is the biggest source of income for the Alibaba group.

Earlier this year, there were rumors that Alibaba.com would be listed in either the Nasdaq Stock Market or the Hong Kong Stock Exchange. According to a Wall Street Journal report, a person familiar with the plans said then that the initial public offering could raise about 800 million USD (596.8 million euros) and was slated for the third quarter.

The Wall Street Journal says that a lot of internet companies choose to list in the Nasdaq because its investor base understands technology companies and the valuations are higher. However, there are also higher costs to listing in the United States.

Alibaba's popularity in the Hong Kong market will likely make it possible for the company to attract demand without the extra costs of a US listing.