eBay is in talks to acquire a stake in Gmarket, a Korean marketplace. Cowen and Company analyst Jim Friedland had written about Gmarket and the competitive landscape in Korea last month in a research note. "Gmarket has not been impacted by aggressive promotional activity from Internet Auction (eBay Korea); we believe that Gmarket will continue to outperform its competitors and that Gmarket could eventually drive eBay Korea out of the market."
eBay issued a statement on Wednesday published on the eBay Ink corporate blog.
"eBay Inc., Interpark and Interpark's Chairman, Ki Hyung Lee, confirmed today that they are in discussions about a possible sale to eBay Inc. of Interpark's and Ki Hyung Lee's interests in Gmarket. While no definitive agreement has yet been signed or reached, in connection with the discussions, a voluntary preliminary filing has been made with the Korea Fair Trade Commission and preliminary approval of the KFTC is being sought. There can be no assurance that the KFTC will approve the possible transaction, that an agreement will be reached or that a transaction will occur. None of the parties currently intends to comment further about this matter until such time, if ever, that they enter into a definitive agreement providing for the completion of a transaction."
Friedland issued a note on Thursday analyzing the news, and wrote, "We do not think that eBay is interested buying the entire company given its poor track record in operating wholly owned assets in Asia. However, we think it signals that eBay believes market share losses and margin declines at Internet Auction (eBay Korea) are irreversible and that the company is considering alternative strategies to benefit from Korean e-commerce growth."
