US based online auction company EBay Inc. is exiting the China market. eBay said its China-based subsidiary, eBay EachNet, and TOM Online will enter into a joint venture. where eBay will take 49 percent stake and Tom Online Inc., an Internet company based in Beijing will hold a 51% stake. The new website will replace eBay’s China website. eBay will put up $40 million and Tom Online will contribute another $20 million.
Commenting on the joint venture, Meg Whitman, President and CEO, eBay Inc said, “eBay has helped pioneer e-commerce in China, and by combining our expertise with that of a strong local partner like TOM Online, we are even better positioned to participate in this growing market. This agreement is a sign of our continued commitment to delivering the best online buying and selling experiences in China.”
Both companies would make financial contributions to the venture. eBay will contribute US$40 million, while TOM Online will contribute US$20 million. Further, the companies said that they could equally share in an investment of up to an additional US$10 million if mutually agreed upon. eBay said that it would also contribute its EachNet subsidiary, while TOM Online would contribute
Sources: Trading Markets – Shanghai Daily
David Temple
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I can’t believe that eBay is getting hustled by Tom Online into this deal. Check out the details of the deal and you’ll know what I’m talking about. eBay must be really desperate to exit China and this is their last ditch exit strategy.
Yeah he was going to be the GM for the research center in Shanghai but who knows now? Do you think Yahoo will take him back?
David – I guess we don’t know what will be happening to the former Yahoo CTO who was reportedly moving across just a couple of weeks ago?