eBay: No Mas China

Fairly remarkable, even if not entirely unexpected given its troubles in the Chinese market, eBay has apparently decided to exit China directly and re-enter via a partner:

Ebay Inc. plans to pull back from the fast-growing Chinese market by shutting down its main Web site in China and replacing it with a new site that would be largely run by a Beijing-based Internet company, say people familiar with the matter, in the latest sign of trouble afflicting the onetime Internet star.

The San Jose, Calif., company plans to announce as early as Tuesday that it is taking a 49% stake in the new site in a partnership with online portal and wireless operator Tom Online Inc., these people say. Tom Online would hold a 51% stake. Up till now, eBay had operated its own auction site in China.

You can see some of the problem here if you look at how the Alibaba-owned Taobao.com has been putting increase traffic space between it and Ebay in China: