The site is the largest e-commerce operator in China: Alibaba.com. Interestingly enough, the firm -- which is traded in Hong Kong -- is 40% owned by Yahoo! (NASDAQ: YHOO).

Well, last night, Alibaba.com reported its quarterly results. While earnings fell 34.2% to $38.2 million, the fact remains that top-line growth was robust. That is, revenues spiked 23.6%.

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"My top speculative idea for 2008 is Alibaba.com (HK: 1688), which trades on the Hong Kong exchange," says Yiannis Mostrous, editor of The Silk Road Investor. "Alibaba.com was one of the biggest IPOs of the year and although the initial excitement has subsided, the longer-term story remains intact.

"Alibaba's business is simple. Companies can post products for sale or purchase from Alibaba's web site for free. It charges suppliers from China and Hong Kong an annual fee of as much as US$8,027 to become premium members. A similar service is offered to suppliers from other regions for an annual fee of US$589.

"Alibaba.com is the flagship company of the Alibaba Group that includes Taobao, which operates an online shopping marketplace for consumers in China; Alipay, China's leading online payment service; Yahoo! China and Alisoft, an internet-based business management software company targeting small and medium enterprises in China.

"According to the latest statistics, China was home to 162 million internet users at the end of June, second only to the US. The country is expected to surpass the US as the world's largest web market by users next year.

"Given the company's high valuations, viewing it as a speculative play should be the right approach for now. But don't underestimate its potential if the markets and the economy remain reasonable strong entering 2008. Buy Alibaba up to HK$50."

OK, so is China really communist? Not from what I can see.

Just look at the IPO market. Yes, it's been sizzling.

And, of course, the latest mega deal is the public offering of Alibaba.com, which operates a sprawling group of fast-growing Internet properties.

According to a report from Bloomberg.com, the IPO surged from HK$13.50 to HK$39.50. In fact, Alibaba.com sports a market cap of a cool $25.7 billion. That is a thrill for Yahoo! (NASDAQ: YHOO), which has a 39% stake in the company.

Actually, Alibaba.com even has earnings. Although, at the current valuation, they are more than 150 times the market cap. That makes Google (NASDAQ: GOOG) look pretty cheap.

While China certainly has strong growth prospects, there are still risks. Can the country continue its torrid growth rate? What about political instability?

If you look at the history of US markets, strong IPO markets are usually a sign of excess and a top. So, investors should show caution.

And if you want to check out the IPO action here in the US -- which is not as frothy -- you can visit DealProfiles.com.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

Yahoo! Inc (NASDAQ: YHOO) recently up $2.40 to $33.74:

www.Alibaba.com, a Chinese internet company, is expected to be IPO'd on the Hong Kong bourse on November 6th. YHOO made a $1.4 billion investment in 39% of Alibaba in 2005. YHOO Chairman of the Board Terry Semel sold 850,000 shares of YHOO at $30.47 October 23-24, according to Dow Jones. YHOO call option volume of 503,701 contracts compares to put volume of 52,600 contracts. YHOO November option implied volatility of 50 is above its 26-week average of 37 according to Track Data, suggesting larger price risk.

Microsoft Corporation (NASDAQ: MSFT) recently up $2.91 to $34.90:

Pacific Growth Equities says " Blowout F1Q results; conservative guidance leave room for additional upside if the sales momentum continues." MSFT call option volume of 353,588 contracts compares to put volume of 114,142 contracts. MSFT November option implied volatility of 25 is below a pre-EPS level of 32 according to Track Data, suggesting decreasing risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

The investors who are flocking to Yahoo! Inc. (NASDAQ: YHOO) today because Bear Stearns argued that the internet portal would make an attractive acquisition target need to take a deep breath and count to ten because any deal isn't going to happen any time soon.

For one thing, internet advertising is going to take a hit over the next few months because financial services firms are going to cut spending due to the subprime mortgage meltdown. Plus, why would any company buy Yahoo! while questions remain about Project Panama.

Shares of Yahoo!, up about 6% this year, have gotten beaten up badly over the past year, tumbling about 19%. Pundits are predicting gloom and doom for the Sunnyvalle, Calif.-based company, which continues to struggle against Google Inc. (NASDAQ: GOOG) and other web sites such as News Corp.'s (NYSE: NWS) MySpace for advertising dollars.

The news, though, hasn't been all bad. President Susan Decker and other top Yahoo! executives have been buying shares over the past few months. Yahoo's traffic also will benefit as fantasy football season ramps up. Bloomberg News notes the initial public offering of Alibaba.com may boost the company's earnings by 78 cents per share.

Those are more compelling reasons to buy Yahoo. Remember, a potential buyout is like a potential weight loss. The gap between theory and reality can be huge.

Back in 2005, Yahoo! Inc. (NASDAQ: YHOO) invested a cool $1 billion for a 40% stake in Alibaba.com, a leading Internet conglomerate in China. But the buzz has always been, when will the IPO be filed?

According to a piece in The Wall Street Journal [subscription], it could happen soon. But the IPO may not necessarily be in the U.S. Hey, China has a large pool of IPO-crazy investors, right?

Alibaba's key businesses include an eBay–like auction site, a software division, and a business-to-business (B2B) platform for suppliers.

As for the IPO, it looks like the B2B part will be the segment to hit the public markets. The underwriters include the biggies: Goldman Sachs Group (NYSE: GS) and Morgan Stanley (NYSE: MS).

As seen with the success of Baidu.com Inc. (NASDAQ: BIDU), it's a good bet that an Alibaba offering will also be well received -- and a big money maker for its investors.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.