China: Struggling eBay, winning Tom Online
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From being the partner of Skype in China, Internet company Tom Online is growing into the eBay in China. The auction company gives up its activity in the country, and will form a joint-venture in which it will control 49%, leaving the rest of the 51% to Tom Online. EBay will initially contribute 40 million dollars to the venture, and Tom Online will contribute 20 million, said the Wall Street Journal quoting a person familiar with the situation.
Observers have been considered the retreat as a defeat for eBay, whose Chinese unit growth unable to rival local giant auction site TaoBao, owned by Alibaba.com. But it’s also a shift in eBay strategy. Skype user base is growing rapidly in China, and eBay bets on this second option and market to cross promote its auctioning services.
Tom Online is the big winner of the situation — its shares has already jumped by 13% for a session high of 18.20%. Besides the opportunity to go after Alibaba, the alliance could also push the Skype-eBay integration further than it is now.
Dec 19, 2006 | By Nuno
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