UPDATE 2-China's Alibaba profit hit as it bets on expansion

* Q3 net profit down 20 pct, worst in 3 quarters

* Sees very limited growth potential from Q4 to Q1 2010

* Operating expenses shoot up 61 percent

* Paying membership base grows 45 percent

* Alibaba shares end up 3.5 percent before results (Adds details, CEO and analyst quotes)

By Melanie Lee

SHANGHAI, Nov 10 (Reuters) - Alibaba.com (1688.HK), China's largest e-commerce company, reported its worst profit in three quarters after betting on acquisitions and product development to tap the region's early recovery from the global downturn.

The company, Yahoo's (YHOO.O) business partner in China, sees limited growth potential from this year's fourth quarter to the beginning of next year and is looking for more partnerships in the United States to expand its business.

Despite the weak profit, the growth campaign is helping to drive up the company's user base.