1

Alibaba.com Q4 2010 and FY 2010 Results Demonstrate Strong Financials and

the Evolution toward a More Balanced Business Model

Stronger margins and new efforts in maintaining trust and safety

set foundation for continued long-term growth

Highlights

User growth: We had 809,362 paying members on both the international and China marketplaces as of

the end of 2010, up 31.6 percent y-o-y. Including those of HiChina, we had more than 1 million paying

members. Total registered users on our international and China marketplaces grew almost 30 percent

y-o-y to more than 61.8 million.

Total revenue: Total revenue in Q4 2010 was RMB1,521.5 million, up 37.6 percent y-o-y. Full-year

revenue was RMB5,557.6 million in 2010, representing a 43.4 percent increase from 2009.

As-reported net income1: As-reported Q4 net income was RMB410.4 million, up 46.0 percent y-o-y.

As-reported full-year net income was RMB1,469.5 million, representing an increase of 45.1 percent y-o-y.

Deferred revenue: Deferred revenue was RMB4,434.4 million as of the end of 2010, representing an

increase of 29.0 percent from RMB3,437.0 million as of the end of 2009, and a 14.6 percent increase

from the end of Q3 2010, due to the strong paying member acquisition in Q4 ahead of the launch of the

higher-priced 2011 China Gold Supplier membership.

Recurring free cash flow: We generated RMB2,840.8 million of recurring free cash flow in 2010,

representing a significant increase of 56.4 percent y-o-y. We generated RMB1,187.2 million of recurring

free cash flow in Q4 2010, a 62.2 percent increase from Q3 2010 thanks to the strong increase in

paying members.

Cash position: Despite the acquisitions we completed in 2010, our cash balance still increased 32.8

percent from the end of 2009 to RMB9,583.5 million as of December 31, 2010.

HONG KONG, March 17, 2011 – Alibaba.com Limited (HKSE: 1688) (1688.HK), the world‟s leading small

business e-commerce company, today announced financial results for the quarter and year ended

December 31, 2010, which demonstrate our strategies to evolve our business model are setting the

foundation for balanced, continued long-term growth.

Q4 2010 and FY 2010 Financial and Operational Highlights

FINANCIAL HIGHLIGHTS

Q4 2010

RMB million

Q4 2009

RMB million

Change

FY 2010

RMB million

FY 2009

RMB million

Change

Revenue 1,521.5 1,105.7 +37.6% 5,557.6 3,874.7 +43.4% Earnings before interest, taxes and

amortization (“EBITA”) 398.4 260.1 +53.2% 1,587.3 1,043.1 +52.2%

Profit attributable to equity owners 410.4 281.2 +46.0% 1,469.5 1,013.0 +45.1% Share-based compensation expense 101.9 57.5 +77.2% 341.0 200.4 +70.2%

Deferred revenue and

customer advances 4,434.4 3,437.0 +29.0% 4,434.4 3,437.0 +29.0%

Recurring free cash flow 1,187.2 693.0 +71.3% 2,840.8 1,816.2 +56.4%

Earnings per share, basic and diluted (HKD)

9 cents 6 cents +50.0%

33 cents

23 cents

+43.5%

1 Excludes profit attributable to non-controlling interests.

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OPERATIONAL HIGHLIGHTS Q4 2010 Q3 2010

Q4 change

Q4 2010 Net adds FY 2010 FY 2009

FY change

FY 2010 Net adds

Registered users 61,801,281 56,722,482 +9.0% 5,078,799 61,801,281 47,732,916 +29.5% 14,068,365 International marketplace 18,024,993 14,921,668 +20.8% 3,103,325 18,024,993 11,578,247 +55.7% 6,446,746 China marketplace 43,776,288 41,800,814 +4.7% 1,975,474 43,776,288 36,154,669 +21.1% 7,621,619 Storefronts 8,544,544 8,199,384 +4.2% 345,160 8,544,544 6,819,984 +25.3% 1,724,560 International marketplace 1,696,905 1,622,597 +4.6% 74,308 1,696,905 1,400,326 +21.2% 296,579 China marketplace 6,847,639 6,576,787 +4.1% 270,852 6,847,639 5,419,658 +26.3% 1,427,981 Paying members (Note 1) 809,362 750,937 +7.8% 58,425 809,362 615,212 +31.6% 194,150 China Gold Supplier 121,274 108,572 +11.7% 12,702 121,274 96,110 +26.2% 25,164 Global Gold Supplier (Note 2) 10,434 11,017 -5.3% (583) 10,434 17,786 -41.3% (7,352) China TrustPass 677,654 631,348 +7.3% 46,306 677,654 501,316 +35.2% 176,338

Note 1: Include paying members with active storefront listings on our international and China marketplaces as well as paying members who have paid membership package subscription fees but whose storefronts have not been activated. Note 2: The number of Global Gold Supplier members has decreased since we upgraded the product with more features and higher pricing in July 2009.

“2010, the „Year of Customer Service,‟ was an important year for Alibaba.com. It was the year when the

company hit the 1 million paying member milestone; the year when we completed the most acquisitions

domestically and internationally; and the year when we increased endeavors to maintain a trustworthy

e-commerce platform and refocused on creating value for our customers,” said Jonathan Lu, CEO and

Executive Director of Alibaba.com. “This strong financial performance achieved despite the slow progress of

the global economic recovery and the company‟s aggressive action against fraud late in the year, along with

the successful upgrade of our business model, are strong evidence of the company‟s intent to serve

customers better while maintaining balanced financials.”

Key changes to Alibaba.com‟s business model during 2010 included:

Healthier balance between export-related business and non-export-related business:

Driven mainly by growing revenue contributions from our China marketplace and the addition of HiChina,

non-export-related revenue increased from 29 percent of total revenue in 2007 to 42 percent in 2010.

This more-balanced proportion allowed Alibaba.com to capture opportunities from the rapid growth of

domestic demand in China and from e-commerce activities beyond traditional small and medium

enterprise online marketing.

Healthier balance between membership sale and sale of value-added services (VAS):

By listening to our customers‟ needs and introducing a variety of VAS to meet those needs, we

increased our non-membership fee revenue from 21 percent of total revenue in 2007 to 33 percent in

2010. Since VAS in general did not involve additional customer acquisition costs – an increasing

number of customers have been purchasing our VAS offerings on a self-service basis – the margin we

enjoyed from VAS was higher than that from membership fees.

Introduction of transaction-based platforms:

Before 2009, Alibaba.com was purely a platform for the exchange of information between buyers and

sellers to facilitate their online marketing activities. However, we have been exploring the value we can

bring to our customers by enabling them to complete online transactions via Alibaba.com. Our first effort

in this area is the launch of AliExpress, our small-order online wholesale transaction platform, followed

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by the introduction of 1688.com in China when we upgraded our China marketplace. Both transaction

platforms were officially launched in the second quarter of 2010, and the monetization of AliExpress

already started during the year. We are confident that the annualized gross merchandize value (GMV) of

the two transaction-based platforms will continue to increase with ongoing high growth potential.

Expansion to include a wide array of services, laying the foundation for “Work at Alibaba”:

Over the years, our services have grown both in breadth and in depth. In terms of marketing-related

features, Ali-ADvance, a more sophisticated “pay-for-performance” model for keyword search, was

introduced on both marketplaces. The significant growth in traffic on the websites can now be

monetized through the performance-driven Ali-ADvance. In addition to deepening our value in the area

of “Meet at Alibaba,” we started to offer a wide selection of export-related services for the small

exporters in China. Besides the existing export-related services such as Factory Audit and Japan Link,

we expect to provide more comprehensive services, for instance, customs clearance, tax refund and

trade financing. On the front of helping our customers more effectively grow and manage their

businesses, we offered more SaaS (software as a service)-based tools and applications. Thousands of

customers have purchased these offerings through our website.

Establishment of channels to provide small businesses with access to capital:

We addressed the financing needs of small businesses through Ali-Loan. Since its launch, we have

seen a strong demand for this product and we have recently started to monetize the significant value we

created for our members.

Outlook

“In 2011, we intend to place increased emphasis on servicing our existing paying members rather than

accelerating member acquisition.” Lu continued. “We will enhance the customer experience of our Gold

Supplier and China TrustPass members through service upgrades that we hope will result in a stable

membership base and its sustainable growth. Moving towards a more balanced business model, we expect

our business and financial performance will be even more resilient to global issues.

“In addition, while maintaining our „Meet at Alibaba‟ strategy, we will continue to bring more „Work at Alibaba‟

offerings to our customers by introducing additional, richer VAS. The monetization opportunities associated

with this effort is expected to contribute to our business more significantly in the medium term. Membership

revenue growth, VAS revenue growth and margin growth will then follow,” Lu added. “We will also

strengthen the collaboration with Taobao, for instance, our third online transaction-based platform, Wu Ming

Liang Pin (lp.taobao.com) (white-label mall). This new transaction-based platform is designed to give our

quality, wholesale paying members direct access to Taobao, China‟s largest online shopping platform,

helping them benefit from its 370 million users and its tremendous market potential. We are a company that

focuses on creating long-term value for customers. We will keep offering online tools that help them not only

do business more easily, but also manage their businesses more easily. We believe strongly we are doing

the right thing for them.”

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2010 Financial and Operational Results

Paying Members and Revenue

We continued to achieve strong and steady growth in paying members over the last year. As of December

31, 2010, we had 809,362 paying members on both the international and China marketplaces, up 31.6

percent from the end of 2009 and 7.8 percent from the end of the previous quarter. Including those of

HiChina, we had more than 1 million paying members.

In 2010, the growth of our China Gold Supplier customer base was relatively moderate compared with its

tremendous growth in 2009. We net added 25,164 China Gold Supplier members during the year, bringing

the total to 121,274. In the fourth quarter, we net added 12,702 China Gold Supplier members, representing

an 11.7 percent growth q-on-q. Internationally, we had 10,434 Global Gold Supplier members. Due to the

price increase in 2009, there was a decline in the number of our Global Gold Supplier members. However,

the decline in customer base was compensated by the continued growth in revenue generated from this

membership service. The number of our China TrustPass members reached 677,654 at the end of 2010, a

net increase of 176,338 members, or 35.2 percent, from the end of 2009. At the end of the year, about 42

percent of our China TrustPass members were China TrustPass Basic members.

Our deferred revenue and customer advances as of December 31, 2010 were RMB4,434.4 million,

representing a 29.0 percent increase from RMB3,437.0 million as of December 31, 2009. The increase was

due to the continued growth in our paying members and VAS sale as well as the strong acquisition of paying

members in the last quarter of 2010, which was driven by an expected price adjustment of our China Gold

Supplier membership in 2011. During the year, a deferred revenue of RMB15.7 million related to our

fraudulent members was forfeited and transferred to our Fair Play Fund, of which RMB11.2 million was paid

to defrauded buyers as compensation.

Total revenue was RMB5,557.6 million in 2010, representing a 43.4 percent increase from RMB3,874.7

million in 2009. The growth was mainly due to the increase in the number of paying members on both of our

marketplaces. Total revenue for Q4 was RMB1,521.5 million, up 5.0 percent compared to the previous

quarter.

International Marketplace

Revenue from our international marketplace was RMB3,238.2 million in 2010, representing a 34.5 percent

increase from RMB2,406.8 million in 2009 (Q4 2010: RMB881.1 million, up 28.2 percent from Q4 2009).

The growth was primarily due to the increase in revenue from our China Gold Supplier members and VAS

as well as the consolidation of revenue from Vendio Services Inc. (Vendio) and Auctiva Corporation

(Auctiva).

In 2010, we continued healthy growth in our international user base. As of December 31, 2010, we had

18,024,993 registered users on our international marketplace, representing a 55.7 percent growth y-o-y. The

number of storefronts grew by 21.2 percent y-o-y to 1,696,905. By constantly enhancing user experience

and providing a safer and more trusted e-commerce environment, we continued to reinforce our position as

the world‟s leading online marketplace for small businesses in terms of user base.

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China Gold Supplier

We improved our paying members‟ user experience on and stickiness to our platform through the

introduction of more VAS. We also took voluntary action to terminate members who were found to have

committed fraud or those that were suspicious in order to increase trust and safety on our platform. Against

this backdrop, we net added 25,164 China Gold Supplier members during the year, bringing the total of

China Gold Supplier members to 121,274. In the fourth quarter, we net added 12,702 China Gold Supplier

members, representing an 11.7 percent growth q-on-q.

At the end of September 2010, we announced our plan to introduce the CGS 2011 edition, priced at

RMB29,800 per annum, on January 1, 2011. The CGS 2011 edition aims to improve customer experience

and incorporate enhanced features into the international marketplace to enable customers to “Work at

Alibaba.” Key changes in the new product include an upgraded customer work platform and enhanced

functionality of existing features.

VAS revenue contribution exceeded 25 percent of our China Gold Supplier revenue in 2010, compared with

the high-teens percentage in 2009. The VAS growth was faster than what we anticipated, and VAS also

helped improve our members‟ renewal rate in recent quarters.

To start “Work at Alibaba” on our international marketplace, we announced the acquisition of Shenzhen

One-Touch Enterprise Service Limited (One-Touch) in November 2010. One-Touch is a leading provider of

comprehensive export-related services tailored to the needs of small businesses in China, including, among

others, customs clearance, cargo insurance, currency exchange, tax refund, and trade financing. In 2011,

we plan to extend One-Touch‟s export-related services to our existing customer base. We expect to build

significant synergies between Alibaba.com and One-Touch to enhance user experience and paying

members‟ stickiness.

Global Gold Supplier and overseas expansion

As of December 31, 2010, we had 10,434 Global Gold Supplier members. Although the number of Global

Gold Supplier members declined in 2010, the revenue from Global Gold Supplier continued to grow and

was able to compensate for the decline in customer base.

Among all international markets, India, our second largest supplier market in the world, achieved significant

progress in the past year, while other countries namely Japan, Korea, Turkey and Malaysia made steady

progress. In the second half of 2010, we set up our own operations in four major cities in India – Mumbai,

Delhi, Chennai and Bangalore – in order to better serve our vast Indian small business community. We now

have our own direct sales and customer support in the Indian market, and we will continue to expand and

localize our Indian operation in 2011.

AliExpress

We are pleased with the progress made by AliExpress so far in every respect. Within less than 12 months

since its launch, AliExpress has achieved the highest traffic among all international online B2B transaction

platforms and is now the leading player in terms of number of product categories, listed products, etc.

Although the revenue contribution by AliExpress is currently not significant, and we do not see its

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transaction fees as a near-term revenue driver, we believe that this segment of the e-commerce market will

boom.

As a means to grow the buyer base of AliExpress in major buyer markets, in 2010, we completed the

acquisition of two U.S.-based e-commerce companies, Vendio and Auctiva, which provide e-commerce

solutions for sellers on eBay and Amazon. The acquisitions of Vendio and Auctiva combined brought more

than 250,000 online retailers with potential sourcing needs to suppliers on AliExpress.

China Marketplace

Revenue from our China marketplace was RMB1,893.9 million in 2010, representing a 33.9 percent

increase from RMB1,414.9 million in 2009 (Q4 2010: RMB524.8 million, up 30.6 percent from Q4 2009).

The growth was largely due to an increase in the number of China TrustPass members as a result of the

various new business initiatives we introduced in the beginning of the year such as Ali-ADvance and

Premium Placement, which led to an increase in revenue from VAS. During the year, we net added 176,338

paying members on our China marketplace, yielding 677,654 paying members as of year-end, a 35.2

percent increase compared to 501,316 as of December 31, 2009. On the VAS front, revenue from Ali-

ADvance and Premium Placement continued to report healthy growth during the year.

Our China marketplace achieved a significant growth in user base in 2010. Registered users increased by

7,621,619 during the year to 43,776,288 as of December 31, 2010. During the same period, the number of

storefronts increased by 1,427,981 to 6,847,639.

China TrustPass

As of December 31, 2010, the number of our China TrustPass members reached 677,654, a net increase of

176,338 members, or 35.2 percent, from the end of 2009. The significant customer growth was

accompanied by a positive trend in VAS revenue, which grew to more than 20 percent of our China

TrustPass revenue in 2010, compared with the mid-teens level in 2009. We also saw increased VAS usage

and penetration among China TrustPass members, particularly with Ali-ADvance and Premium Placement.

By the end of 2010, more than 100,000 of our China TrustPass members were using Ali-ADvance to enjoy

quality search results ranking and increase their exposure on the China marketplace. During the period, we

enriched our VAS offerings for China TrustPass members and launched SaaS-based applications such as

Smart Marketing Wizard and Inquiry Management to help customers manage their business. The stickiness

to VAS helped reinforce our member renewal rate. Overall, our members‟ renewal rate has been stable.

1688.com

In Q1 2010, we announced an overhaul of our China marketplace and the use of a new domain, 1688.com.

As part of this campaign, we highlighted the new channels with online wholesale transaction features, which

were added to our China marketplace in 2009. 1688.com aims to connect retailers, both online and

traditional ones, to factories and suppliers directly. During 2010, we increased product categories in areas

ranging from apparel to small commodities, home decoration, industrial products and raw materials. We

leveraged on our synergies with Alibaba Group companies such as Taobao and Alipay to increase traffic and

provide a reliable online payment process. It is encouraging to see that the traffic and transaction volume on

1688.com continued to trend up. By the end of 2010, daily transaction volume, measured by GMV,

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quadrupled on 1688.com. We started to benefit from the increased traffic by monetizing it through a pay-for-

performance keyword bidding system. Our priority remains to make 1688.com an easy-to-use, safe and

convenient online wholesale transaction platform to establish an online B2B2C value chain in the domestic

China market.

Trust and Safety

We have taken an unprecedented step, in terms of our policies and enforcement efforts, to foster safety and

trust on our platform. New programs to help protect both buyers and suppliers fall into three areas: 1)

making trade safer, 2) combating e-commerce fraud and, 3) helping the victims.

First, we strengthened our dedicated teams in both our international and China marketplace operations who

are charged with ensuring that Alibaba.com is a safe and trusted e-commerce platform. We took a number

of initiatives to make trade safer, for instance, the introduction of escrow service for payment, the

establishment of the first “Business Integrity Insurance Fund” on our domestic marketplace to protect buyers,

and the introduction of dynamic, transparent trust profiles for suppliers. We began offering VAS such as

“Factory Audit” on suppliers conducted by an independent third party. The factory audit reports were made

available online, allowing buyers to better evaluate the trading and/or production capability of suppliers.

The second focus is on combating fraud, including proactive monitoring and termination of paying members

who have been reported for substantiated fraud and also those who, based on our analysis of a variety of

data, are believed to have a high probability of fraud. In 2010, we significantly stepped up our efforts on this

front. In particular, with respect to China Gold Supplier members, we devoted additional resources to

investigating buyer complaints against them. We proactively de-listed the storefronts and terminated the

accounts of fraudulent members as well as those who, based on our analysis of a variety of data, exhibited

a high risk of fraud.

We also set up a special task force, led by an independent non-executive director, in early 2011 to further

look into our buyer complaints, internal quality control systems, sales incentive system and reporting

structure in order to address the systemic nature of fraudulent problems. The task force identified 2,326

China Gold Supplier members who engaged in fraud against buyers on our international marketplace and

they were terminated by Alibaba.com in 2009 and 2010. The investigation also identified that about 100

sales people as well as a number of sales supervisors and sales managers were directly responsible for

either intentionally or negligently allowing the fraudsters to evade our company‟s authentication and

verification measures and systematically establish fraudulent storefronts on the international marketplace.

These employees were dismissed. Investigations are ongoing, and we will continue to evaluate and monitor

the situation closely. Although this action may create short-term pressure on membership growth, we believe

it is crucial for us to maintain a trustworthy environment which allows buyers and suppliers to engage in

international trade with confidence.

Third, we tried to help victims in fraud cases recoup their losses. In late 2009, we established the “Fair Play

Fund,” the first program of its kind to take membership fees from Gold Supplier members whose

membership got terminated for committing fraud or exhibiting a high risk of committing fraud, and use that

money to offset a portion of losses suffered by buyers. If a buyer is defrauded by a Gold Supplier member,

and they can adequately substantiate their claims, they can apply to receive a portion of these funds based

on the amount of the transaction.

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HiChina

In 2010, the domain name services of HiChina remained strong and significantly contributed to HiChina‟s

revenue. As of December 31, 2010, HiChina had about 2.1 million domain names in service and the total

number of paying members for non-domain name services was around 270,800. This customer base is

largely distinct from that of Alibaba.com, which presents potential synergies for long-term development. In

late 2010, HiChina started to develop “A-li-A-wai,” an Internet infrastructure service package that helps

Alibaba.com and other wholesale e-commerce users design and develop their own websites that are

seamlessly connected to Alibaba.com‟s back-end system for efficient e-commerce management.

To tap the increasing demand for corporate websites in China, in the fourth quarter of 2010, HiChina

launched a new open-platform business model for website design and development as well as an online

transaction platform. This new model provides advanced, efficient and automated “do-it-yourself” website

technology while enhancing quality and standardized services for website development across the country.

In addition, we saw increasing collaboration between HiChina and Alibaba Cloud Computing in the

development of web-hosting services and data storage capabilities by using cloud computing technology.

Ali-Loan Program

The Ali-Loan program, which we introduced in 2007 in partnership with Alibaba Group and various banks to

address our SME customers‟ financing needs, continued to gain traction. As of December 31, 2010, the

loans issued by our partner banks to our paying members totaled more than RMB24 billion. About RMB18

billion of these loans were outstanding as of the end of 2010. We also continued to broaden the

geographical reach of the Ali-Loan program to benefit more SMEs. Totally, the program is offered in four

provinces including Zhejiang, Jiangsu, Guangdong and Fujian as well as two major cities including Beijing

and Shanghai. In 2011, we plan to enhance the Ali-Loan program in terms of service quality. Meanwhile, we

have started to trial-monetize the Ali-Loan program by charging our paying members who borrow money

from the program a service fee, which is calculated based on the size of the loan successfully granted.

Financial Results

Cost of revenue increased by 82.1 percent in Q4 2010 compared to Q4 2009 and increased to RMB931.0

million in 2010, representing a 74.2 percent increase from RMB534.4 million in 2009. Included in the cost of

revenue was a share-based compensation expense of RMB26.4 million and RMB15.9 million in 2010 and

2009, respectively. Our cost of revenue increased mainly in line with our revenue growth: costs were

incurred for acquiring domain names for customers of HiChina; business taxes and related surcharges as

well as authentication and verification expenses increased proportionally with the growth in our customer

base and revenue; bandwidth and depreciation expenses increased due to a rise in user traffic on our

websites; and staff costs increased due to our business expansion.

Gross profit increased to RMB4,626.6 million in 2010, up 38.5 percent from RMB3,340.3 million in 2009.

Gross profit margin declined slightly to 83.2 percent in 2010, compared with 86.2 percent in 2009. The

decline was primarily a result of the higher cost of revenue stemming from the consolidation of the financial

results of HiChina and Vendio, which have relatively lower gross profit margins due to their different

business models.

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Our profit margin before interest, taxes and amortization (EBITA margin) (non-GAAP) was 28.6

percent for the year, an increase from 26.9 percent in 2009. EBITA margin before share-based

compensation expense (non-GAAP) was 34.7 percent for the year, an increase from 32.1 percent in 2009.

The increase in EBITA margin before share-based compensation expense was mainly caused by lower

sales and marketing expenses as a percentage of revenue, which was partially offset by a lower gross profit

margin and other operating income.

Net income (profit attributable to equity owners) was RMB410.4 million in the fourth quarter of 2010, an

increase of 46.0 percent over Q4 2009, and RMB1,469.5 million for full-year 2010, up 45.1 percent from

2009. The significant increase compared to the previous full-year results was due to the increase in new

customers and growing economies of scale.

Earnings per share, basic and diluted, were 9 Hong Kong cents for the fourth quarter, and 33 Hong Kong

cents for the full year of 2010, compared to 23 Hong Kong cents (basic and diluted) for the full year of 2009.

Diluted earnings per share before share-based compensation expense (non-GAAP) was 41 Hong Kong

cents in 2010, compared to 27 Hong Kong cents in 2009.

Recurring free cash flow (non-GAAP) was RMB1,187.2 million in Q4 2010, representing a 71.3 percent

increase when compared with Q4 2009, and RMB2,840.8 million for the year, representing a 56.4 percent

increase from 2009. The increase was mainly due to the strong increase of paying members, who prepay

for their memberships, as reflected in the increase in our deferred revenue and customer advances and the

strong growth in cash revenue from the sale of memberships in the fourth quarter following our

announcement that we would increase the price of our China Gold Supplier membership in 2011.

Cash and bank balances as of December 31, 2010 were RMB9,583.5 million, representing a 32.8 percent

increase from December 31, 2009, notwithstanding a few acquisition initiatives completed in 2010.

-End-

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About Alibaba.com Limited

Alibaba.com (HKSE: 1688) (1688.HK) is the global leader in e-commerce for small businesses and the

flagship company of Alibaba Group. Founded in 1999 in Hangzhou, China, Alibaba.com makes it easy for

millions of buyers and suppliers around the world to do business online through three marketplaces: a

global trade platform (www.alibaba.com) for importers and exporters; a Chinese platform (www.1688.com)

for domestic trade in China; and, through an associated company, a Japanese platform (www.alibaba.co.jp)

facilitating trade to and from Japan. In addition, Alibaba.com offers a transaction-based wholesale platform

on the global site (www.aliexpress.com) geared for smaller buyers seeking fast shipment of small quantities

of goods. Together, these marketplaces form a community of more than 61 million registered users in more

than 240 countries and regions. Alibaba.com also offers business management software and Internet

infrastructure services targeting businesses across China, and provides educational services to incubate

enterprise management and e-commerce professionals. Alibaba.com also owns Vendio and Auctiva, leading

providers of third-party e-commerce solutions for online merchants. Alibaba.com has offices in more than 70

cities across Greater China, India, Japan, Korea, Europe and the United States.

For investor inquiries please contact:

Lindy Lau

Tel: +852 2215 5215

Email: lindylau@hk.alibaba-inc.com

For media inquiries please contact:

Linda Kozlowski

Tel: +852 9028 5150

Email: lkozlowski@hk.alibaba-inc.com

For photos and broadcast-standard video supporting this press release, please visit

www.thenewsmarket.com/alibaba. If you are a first-time user, please take a moment to register. If you have

any questions, please email journalisthelp@thenewsmarket.com.

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2010 2009 2010

RMB’000 RMB’000

Revenue International marketplace 2,406,804 3,238,243 China marketplace 1,414,897 1,893,899 Others 53,027 425,444

──────────── ─────────────

Total revenue 3,874,728 5,557,586 Cost of revenue (534,438) (931,016) ──────────── ─────────────

Gross profit 3,340,290 4,626,570 Sales and marketing expenses (1,623,845) (2,050,561) Product development expenses (384,333) (580,173) General and administrative expenses (409,708) (568,324) Other operating income, net 150,566 109,026 ──────────── ───────────── Profit from operations 1,072,970 1,536,538 Finance income, net 140,941 176,398 Share of losses of associated companies and a jointly controlled entity, net of tax (37,492) (6,479)

──────────── ─────────────

Profit before income taxes 1,176,419 1,706,457 Income tax charges (163,393) (236,445) ──────────── ─────────────

Profit for the year 1,013,026 1,470,012 Other comprehensive income/(expense)

Net fair value gains on available-for-sale investments 222 5,640 Currency translation differences 247 (21,533)

──────────── ─────────────

Total comprehensive income 1,013,495 1,454,119 ════════════ ═════════════

Profit for the year attributable to

Equity owners of our Company 1,013,026 1,469,464 Non-controlling interests - 548

──────────── ─────────────

Profit for the year 1,013,026 1,470,012 ════════════ ═════════════

Total comprehensive income attributable to Equity owners of our Company 1,013,495 1,453,571 Non-controlling interests - 548

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Total comprehensive income 1,013,495 1,454,119 ════════════ ═════════════

Dividend per share

Special cash dividend (HK$) 20 cents 22 cents ════════════ ═════════════ Earnings per share, basic (RMB) 20 cents 29 cents ════════════ ═════════════

Earnings per share, diluted (RMB) 20 cents 29 cents ════════════ ═════════════

Earnings per share, basic (HK$) (Note3) 23 cents 33 cents ════════════ ═════════════

Earnings per share, diluted (HK$) (Note 3) 23 cents 33 cents ════════════ ═════════════ Note 3: The translation of Renminbi amounts into Hong Kong dollars has been made at the rate of RMB0.8714 to HK$1.0000 (2009: RMB0.8812 to HK$1.0000). No representation is made that the Renminbi amounts have been, could have been or could be converted into Hong Kong dollars or vice versa, at that rate, or at any rate or at all.

12

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE QUARTER ENDED DECEMBER 31, 2010

Q4 2009 Q4 2010 Q3 2010 Q4 2010

RMB’000 RMB’000 RMB’000 RMB’000 Revenue

International marketplace 687,102 881,103 847,153 881,103 China marketplace 402,001 524,847 492,177 524,847 Others 16,616 115,521 109,945 115,521

Total revenue 1,105,719 1,521,471 1,449,275 1,521,471

Cost of revenue (146,821) (267,401) (242,050) (267,401) Gross profit 958,898 1,254,070 1,207,225 1,254,070

Sales and marketing expenses (481,640) (560,019) (526,212) (560,019) Product development expenses (121,396) (170,269) (160,258) (170,269)

General and administrative expenses (130,853) (177,878) (145,437) (177,878) Other operating income, net 41,805 31,133 20,783 31,133

Profit from operations 266,814 377,037 396,101 377,037

Finance income, net 32,854 51,779 48,392 51,779

Share of losses of associated companies and a jointly controlled entity, net of tax

(7,916)

(937)

(1,740)

(937)

Profit before income taxes 291,752 427,879 442,753 427,879

Income tax charges (10,599) (16,635) (77,036) (16,635)

Profit for the period 281,153 411,244 365,717 411,244 Other comprehensive income/(expense)

Net fair value gains on available-for-sale investments

160

5,080

220

5,080

Currency translation differences 353 (8,833) (8,894) (8,833)

Total comprehensive income for the period 281,666 407,491 357,043 407,491

Profit/(loss) attributable to

Equity owners of our Company 281,153 410,440 366,066 410,440 Non-controlling interests - 804 (349) 804

Profit for the period 281,153 411,244 365,717 411,244

Total comprehensive income attributable to

Equity owners of our Company 281,666 406,687 357,392 406,687 Non-controlling interests - 804 (349) 804

Total comprehensive income for the period 281,666 407,491 357,043 407,491

Dividend per share

Special cash dividend (HK$) - 22 cents - 22 cents

Earnings per share, basic (RMB) 6 cents 8 cents 7 cents 8 cents

Earnings per share, diluted (RMB) 6 cents 8 cents 7 cents 8 cents

13

Earnings per share, basic (HK$) (Note 4) 6 cents 9 cents 8 cents 9 cents

Earnings per share, diluted (HK$) (Note 4) 6 cents 9 cents 8 cents 9 cents

Note 4: The translation of Renminbi amounts into Hong Kong dollars has been made at the rate of RMB0.8713 and RMB0.8580 to HK$1.0000 for the third and fourth quarter of 2010 respectively (fourth quarter of 2009: RMB0.8809 to HK$1.0000). No representation is made that the Renminbi amounts have been, could have been or could be converted into Hong Kong dollars or vice versa, at that rate, or at any rate or at all.

14

SUPPLEMENTARY FINANCIAL INFORMATION (CONTINUED) Q4 2009 Q4 2010 Q3 2010 Q4 2010

RMB’000 RMB’000 RMB’000 RMB’000

Revenue

International marketplace

China Gold Supplier 669,159 856,820 824,094 856,820

Global Gold Supplier 17,943 24,283 23,059 24,283

687,102 881,103 847,153 881,103

China marketplace

China TrustPass 379,373 505,841 472,303 505,841

Other revenue (Note 5) 22,628 19,006 19,874 19,006

402,001 524,847 492,177 524,847

Others (Note 6) 16,616 115,521 109,945 115,521

Total 1,105,719 1,521,471 1,449,275 1,521,471

Recurring free cash flow (Non-GAAP)

Net cash generated from operating activities 986,360 1,212,532

847,562 1,212,532

Purchase of property and equipment, excluding lease prepayment and construction costs of corporate campus project (62,068) (25,305) (38,906) (25,305)

One-off tax refund and others (Note 7) (231,259) - (76,766) -

Total 693,033 1,187,227 731,890 1,187,227

Share-based compensation expense 57,512 101,939 108,927 101,939

15

As of December 31,

2009

As of December 31,

2010

As of September 30,

2010

As of December 31,

2010

RMB’000 RMB’000 RMB’000 RMB’000

Cash and bank balances 7,216,445 9,583,533

8,361,076 9,583,533

Deferred revenue and

customer advances 3,436,975 4,434,387

3,868,937 4,434,387

Note 5:

Other revenue earned with respect to our China marketplace mainly represents advertising fees paid by third party advertisers. Note 6:

Other revenue mainly represents revenue earned from the sale of Internet infrastructure and application services and certain software

products.

Note 7: One-off tax refund and others mainly represented a cash refund of prepaid tax received. Pursuant to the New EIT Law and Guoshuihan [2008] No. 875, taxable income should be computed on an accrual basis for EIT purpose. As a result, Alibaba China changed its EIT filing basis from cash basis to accrual basis in 2009 and cash refunds of RMB76.8 million and RMB231.3 million, being tax prepaid under cash basis, were received in the third and fourth quarters of 2010 respectively.