EBay pays $30 m for stake in China auction site

By : |March 18, 2002 0



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.

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