eBay’s Battles In China Heat Up
Published May 1st, 2006
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Insiders at eBay Inc.’s (EBAY) China unit haven’t denied that a general feeling of malaise permeates the company’s China operations, withering under the constant fire of Alibaba.com Corp.’s Taobao consumer-auctions site.
Even as eBay struggles to realize any advantage from the integration of the former Eachnet group, Alibaba Chief Executive Jack Ma, typically outspoken, last week told Marketwatch’s Bambi Francisco that “the game is over” between his company and primary competitor eBay. Last week I mentioned a potential tie-up between eBay’s global operations and Yahoo Inc. (YHOO) (which owns 40% of Alibaba) or Microsoft Corp.’s (MSFT) MSN. But at this point, eBay would probably consider a wide range of options for its China unit.
EBay management apparently recognizes that Alibaba and others have managed to park its China business in a corner of the growing e-commerce sector while its competitors spin donuts on the front lawn. Yahoo’s Jerry Yang and his largest shareholders realized the same thing back in mid-2005, and took action. After spending so much time in China recently, Meg Whitman may have come to a similar conclusion. As a result, eBay is rumored to be looking hard at potential deals to gain traction in the China marketplace.
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