Bosses at eBay announced on March 18 the company would pay US$30 million for a 33 percent stake in EachNet as the first step into China's fast growing Internet market.

"All the money is now in place," said Shao Yibo, chief executive of EachNet, at a joint press conference of eBay and EachNet in Beijing yesterday.

He went further to explain that the two sides have formed a strategic alliance instead of a mere business acquisition.

"We will use the funds to strengthen the construction of our website, develop more trading tools and attract more buyers and sellers," said Shao.

Founded in 1999, EachNet has attracted 3.5 million registered users.

Meg Whitman, eBay's chief executive and president, said the establishment of the strategic alliance will enable eBay to make information available to EachNet and help it hammer out suitable development strategies and best practice guidelines in China.

"We will not invest in other websites in China and US$30 million is the right amount to help EachNet's development," said Whitman, adding she has no plan to raise the 33 percent stake in EachNet at the moment.

Despite the well-documented collapses of competitors, eBay has developed its auction model in the United States and has been expanding abroad.

In January, eBay 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 and US$510 million.

According to Whitman, only 18 percent of its revenue is from outside the United States.

"We are very optimistic about China's Internet development and enthusiastic about China's e-commerce industry," said Whitman.

(Xinhua News Agency March 26, 2002)