Wednesday, September 27, 2006

eBay to exit China?

The market is abuzz with rumours that eBay is ceding the Chinese market to Alibaba's and planning to sell its Eachnet service to Hong Kong's economic 'superman' Li Ka Shing's Tom Group.

Xinhua's report of the story admits early on that analysts believe a complete eBay withdrawal is unlikely at this juncture. eBay has so far invested $180 million in Eachnet, so watch the price carefully if a deal does materialise. Li is not generally known for over-paying! reports the Li rumour but passes on another that Tencent is also interested in acquiring all or part of the business.

Pouring fuel on the fire is a Wall Street Journal report (behind its firewall) that Eachnet's CEO Martin Wu has quit. MarketWatch also had something on this yesterday.

The last time we poured cold water on a rumour like this, Yahoo! ended up investing $1 billion in So, we'll be more careful this time and wait and see.

Update: I'm working backwards through the sources of this and find a piece on the China Web 2.0 Review early yesterday citing a CCID piece (in Chinese).

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