Sources: eBay to Close Chinese Site

eBay is reportedly pulling out of the Chinese market, instead opting to replace it with a new site that would be run by Bejing-based Tom Online, sources told the Wall Street Journal Monday. So far, the auction site has refused to confirm the speculation.

The San Jose, California-based auction site will have a 49 percent stake in the new operation. A deal could be announced as soon as Tuesday. Both companies plan to invest $60 million in the venture, with eBay contributing $40 million of that total.

If true, it will mark a huge setback for eBay, as it has aimed to grow its business by pursuing an aggressive international strategy.

However, eBay's performance so far in China has been less than stellar. Even though it is the second largest Internet market behind the United States, only three percent of all listings originate from there.

A new site will not launch until next year, and in the meantime the website will continue to operate for international auctions. However, the main site will be closed down, the WSJ says. No announcement on a new identity has yet been made.

Requests to eBay for comment had gone unanswered as of press time.