eBay said it will invest $30 million in cash to acquire a 33% interest in EachNet, an "online trading community" in China. EachNet has 3.5 million registered users who trade a wide variety of items from clothing and antique calligraphy to computers and real estate. EachNet members include individuals and businesses who buy and sell in both auction and fixed price formats.

EachNet was founded in Shanghai in August, 1999 by two United States-educated Chinese entrepreneurs, Bo Shao and Haiyin Tan. Inspired by the potential of the Internet to make commerce more efficient, they created EachNet to bring person-to-person trading to China. Early investors in EachNet include Whitney & Co., AsiaTech Ventures Limited and Orchid Asia Holdings.

In conjunction with its investment, eBay will receive the right to expand its ownership at a later date. Meg Whitman and Matt Bannick, eBay senior vice president, International, will join EachNet's board of directors, which will also include Bo Shao, Yichen Zhang, executive director of CITIC Pacific Limited, and Carlos Bhola, president of Vonage.

eBay will account for the investment using the equity method. Accordingly, the agreement will have no material impact on net revenues or operating expenses and the transaction is not expected to have a significant impact on eBay's 2002 net income, on either a U.S. GAAP or pro forma basis.

While China has a huge consumer base, its current online population is quite small. With a population of 1.2 billion, China has fewer than 30 million Internet users. The United States, with a population of 278 million, has 150 million Internet users. China's EachNet trading community has 3.5 million registered members compared to eBay's worldwide total of 42 million (registered User IDs).

At the end of February, eBay announced the closure of its Japanese operations effective March 31, and said it would acquire NeoCom Technology Co., Ltd., Taiwan's leading operator of auction-style Web sites.