eBay's China unit has entered into an agreement with search firm Baidu, which will promote PayPal on its site, eBay announced on Wednesday. Baidu will also become the exclusive provider of text-based search advertising on eBay Eachnet, and the two will develop a co-branded toolbar.

The announcement seems to conflict with a deal eBay entered into with Google in August in which Google became the exclusive provider of text-based advertising on eBay outside the United States.

The Baidu deal is the third agreement eBay has made with search-engine companies this year. In addition to the Google agreement, eBay entered into a deal with Yahoo in May in which "Yahoo and eBay will explore developing and deploying "click-to-call" advertising technologies on their respective Websites in the U.S." In that deal, Yahoo became the exclusive third-party provider of all graphical advertisements throughout the eBay.com site, replacing the eBay Keywords program that adMarketplace had powered. eBay and Yahoo are also developing a co-branded toolbar as part of that agreement.

According to Wednesday's announcement, eBay and Baidu plan to begin testing the text-based search advertising on eBay EachNet in the first quarter of 2007 and expect to have the full implementation in place during the second quarter of 2007. eBay EachNet and Baidu have also agreed to work together more closely to better optimize eBay EachNet pages for Baidu's natural search engine.

The agreement with Baidu does not live up to rumors that have been circulating since September that eBay was close to selling its Chinese unit or would enter into a partnership with one of the leading Chinese sites.

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