While there's still plenty of mystery surrounding Alibaba's actual worth, market analysts agree on one thing: Alibaba Group's IPO is going to be a blockbuster—and that's good news for Yahoo.
Sunnyvale, Calif.-based Yahoo owns a 24 percent stake in Hangzhou, China-based Alibaba. The Chinese e-commerce company is expected to file its initial documents for a public offering sometime early this week, which will help shed light on its value and how the tech giant's worth is being calculated.
The filing also will help Yahoo's stock price, said Larry Levine, managing director in McGladrey LLP's Financial Advisory practice.
"From a U.S. perspective, Yahoo has the most to gain. Alibaba disclosing its financial data will give Yahoo's stock more stability," Levine said. "It's very difficult to value it with information that we have right now, the price range is very wide...so I would expect that Yahoo's stock price reflects all that volatility."
Recent analysts' estimates value Alibaba from around $150 billion to $200 billion and predict the company could raise up to $15 billion in its IPO, potentially making it the biggest tech IPO in history.
A strong IPO would bode well for Yahoo because Yahoo is required to sell 40 percent of its stake in Alibaba, when it goes public. That means a potential windfall of $19 billion for Yahoo.
"Obviously, when the IPO happens it will be a major source of capital for Yahoo, so that will give the company the power to do things," said Brian Weiser, an analyst at Pivotal Research. "It's not defined what those things will be, whether it will be a deployment of capital towards acquisitions as well as capital to shareholders directly or indirectly, through a dividend or a buyback, we don't know yet."
Yahoo will also need to invest in making its core business—advertising and search—profitable because it won't be able to rely on Alibaba as much for growth, said Jeff Papp, a senior analyst at Oberweis Asset Management.
"If they buy some assets and get their core business going again, then it could be a home run on all fronts," Papp said.
Yahoo's stock recently traded at $36.38, up more than 50 percent when it traded around $24 a year ago.
As for Alibaba, IPO-generated cash will likely be used to expand into western markets, said Papp, who owns Yahoo stock.
Alibaba.com is part of the Alibaba Group, founded in 1999 by Jack Ma, a former English teacher from Hangzhou. Alibaba.com first became profitable in 2002, and Alibaba Group's other platforms include Taobao, Tmall and Alipay. From sales among consumers and small businesses to mobile payment platforms, Alibaba controls roughly 80 percent of China's online commerce market.
"I actually think at some point they [Alibaba] will make a big U.S. push," said Papp of Oberweis Asset Management. "They've recently made some investments in companies in the states and it's smart for them to list here because they are getting huge amount of press. People are going to be talking about them for awhile."
Alibaba has spent about $3.5 billion during the last year on acquisitions, and last month announced it had invested $280 million in Tango, a mobile messaging app development company based in Silicon Valley.
But whether Alibaba's success in Asia translates to other markets remains to be seen. "It's really hard right now for people, without a filing out, to understand what Alibaba is or what it will become," Papp said.
However, Yahoo's earnings report last Tuesday did offer a glimpse into Alibaba's growth potential.
The Chinese company most recently disclosed that its revenue rose 66 percent year over year to $3.06 billion, and that its net income increased 110 percent to $1.4 billion. To put that profit into perspective, $1.4 billion is more than Amazon's and Ebay's net income combined.
—By CNBC's Cadie Thompson. Follow her on Twitter @CadieThompson.