Auction giant eBay Inc., continuing its push to become a global operation, is
putting up $30 million to buy a one-third stake in EachNet, an online,
person-to-person trading operation based in Shanghai.
San Jose, Calif.-based eBay
, which wants to make sure it
gets a share of a mainland China market with a multi-billion dollar
potential, said the two companies “will share best practices to further
expand online trade in China.”
EachNet, which says it has 3.5 million registered users, was founded in
Shanghai in August 1999 by two Chinese entrepreneurs, Bo Shao and Haiyin Tan.
“Our relationship with EachNet is an important step forward in eBay’s
strategy to build a truly global marketplace,” said Meg Whitman, president
and CEO. “Over the next three to four years, China’s e-commerce revenue is
projected to grow nearly twelvefold to more than $16 billion.
As part of the deal, eBay gets the right to expand its ownership at a later
date. Whitman and Matt Bannick, eBay senior vice president for international,
will join EachNet’s board of directors.
eBay said the agreement will have no material impact on net revenues or
operating expenses. China has more than 27 million consumers online, making
it the world’s fifth largest Internet population behind the United States,
Japan, Germany and the UK, eBay said, citing IDC figures.
The step into mainland China follows last
month’s acquisition of NeoCom Technology Co. Ltd., a Taiwan-based
operator of several P2P auction sites, in a $9.5 million deal.
At the same time, eBay exited the Japanese market after signing up only about
20,000 users in the face of strong competition from Yahoo! Inc.
However, an eBay spokesman did not rule out a re-launch in Japan
down the road.
A year ago, eBay took
a majority stake in Internet Auction Co. Ltd., Korea’s largest auction
Web site, for approximately $120 million.
Separately, Sandy Hook, Conn.-based Digibid, a privately-held, Internet-based
auction technology company, teamed with eBay to create an online outlet
center for entertainment technology equipment.
The agreement (financial arrangements were not disclosed) will enable
manufacturers, dealers and distributors of products, such as musical
instruments, pro audio, video, DJ and lighting equipment, to use Digibid’s
platform to reach eBay’s users.