EBay pays $30 m for stake in China auction site

HONG KONG: Online auction pioneer eBay Inc said on Monday it will pay US$30

million in cash for a 33 per cent stake in Shanghai-based trading site EachNet

in the US firm's first foray into mainland China.

Silicon Valley-based eBay, among the highest-profile survivors of the dot.com

meltdown and one of the very few consistent Internet profit-makers, said it has

the right to expand its holding in EachNet. Founded in 1999, EachNet claims 3.5

million registered users.

The Internet is flourishing in China, although advertising-supported portals

have had a difficult time generating revenue. EBay, however, has found success

with its auction model in the United States and has been expanding abroad. Last

month, the company paid US$9.5 million for Taiwan auction site operator NeoCom

Technology.

EBay president and chief executive Meg Whitman said in a statement that

e-commerce revenue in China is projected to grow "nearly twelvefold"

to more than US$16 billion over the next three to four years.

She said the deal with EachNet "is an important step forward in eBay's

strategy to build a truly global marketplace." EBay in January reported a

fourth-quarter net profit of US$25.9 million and expects revenue for the first

half of 2002 to be between US$490-$510 million.