EBay Inc and Yahoo Japan will link up their auction sites to make cross-border bidding easier, in a deal that gives U.S. auction titan eBay another chance to woo lucrative Japanese consumers.
EBay, the world's biggest online auctioneer, and Yahoo Japan, owner of the country's biggest auction Web site, are betting that more shoppers will hunt online for overseas bargains, once language barriers and cumbersome shipment and payment arrangements are cleared.
But such hopes may be misplaced, according to Masato Araki, an analyst at Mitsubishi UFJ Securities.
When you take into consideration shipping and transaction fees, participation may be limited, he said. For Yahoo Japan, the move is unlikely to have a large impact on earnings.
EBay pulled out of Japan in 2002 after only two years, having struggled to make inroads to a market where Yahoo Japan and Rakuten Inc already operated well-established sites.
EBay and Yahoo Japan, which together have about 4 trillion yen ($36 billion) in annual successful bids, will first launch a Japanese-language site on which Yahoo Japan users can bid for eBay items.
The companies launched the site, called Sekaimon or Gateway to the world on Tuesday. The Web address is:
Shop Airlines, a unit of online sales services firm NetPrice will manage the site, payment services, customs clearance and delivery. It plans to charge 15 percent in fees on each transaction.
Revenue from fees and advertising will be shared by the three firms, executives said, without elaborating.
The move is the latest tie-up with a local firm for eBay, whose fast-growing international operations make up 51 percent of its auction and online shopping business.
EBay has been seeking local partners to boost its Asian operations in the face of mounting competition.
In China, it is working on a joint venture with Tom Group's Tom Online to compete against Alibaba.com. In Thailand it plans to launch a joint site with domestic partner Sanook.
Consumer markets in Southeast Asia are growing rapidly, and the firm is considering further partnerships in areas such as Vietnam, Jay Lee, Senior Vice President of eBay Asia Pacific, told Reuters.
These are places where the local customs and markets are very distinct, so they're perfect for partnerships, he said.
Shares in Yahoo Japan rose as much as 6.6 percent on news of the deal, but then fell back, ending the session unchanged at 54,300 yen. NetPrice's shares were untraded, bid up at 69,000 yen, a 7.8 percent gain on the previous day's close, against a 1.0 percent decline in the Nikkei average.
Yahoo Japan, which estimates it has more than half of the online auction market in Japan, is owned about one-third by Yahoo and 40 percent by Softbank Corp. Softbank shares closed down 0.4 percent at 2,600 yen.
(Additional reporting by Edwina Gibbs in Tokyo and Eric Auchard in San Francisco; Editing by Hugh Lawson)