Alibaba.com posts 49% increase in fourth-quarter profit

Business-to-business Internet company Ali baba.com Ltd. on Tuesday said its fourth-quarter net profit rose 49% as members and revenue increased.

Chief Executive David Wei said the company will continue to invest in technology and talent in China this year, since it expects domestic demand to fuel long-term growth.

The improvement in Alibaba's earnings comes as the global economy is recovering from the financial crisis, boding well for exports and domestic consumption in China. Alibaba, which provides listings for mostly Chinese manufacturers soliciting buyers, takes membership fees in return and derives most of its revenue from Chinese exporters. Its parent, Alibaba Group, is 39%-owned by Yahoo Inc.

Alibaba.com said its net profit for the three months ended Dec. 31 rose to 281.2 million yuan ($41.2 million) from 189.2 million yuan a year earlier. Revenue rose 36% to 1.11 billion yuan from 814.2 million yuan a year earlier.

Full-year 2009 net profit fell 12% to 1.01 billion yuan from 1.15 billion yuan a year earlier because of higher marketing costs and increased spending on infrastructure and technology. Alibaba.com's quarterly net profit beat the average 265 million-yuan forecast of seven analysts polled by Dow Jones Newswires.

Mr. Wei said that while he is bullish about export growth in China for the first half of this year, he remains cautious about the outlook for the third quarter because of uncertainties over the recovery in U.S. employment and global financial markets.

"Because of these unchanged basic factors, we should not expect a sustainable recovery in the global economy," Mr. Wei said.

The company, which recognizes revenue from membership fees over a 12-month period, also said an increase in "deferred revenue" income received but not yet recognized in the period was a sign of brightening prospects.