The online auctioneer says it will buy Taiwanese company NeoCom Technology for more than $9.5 million in cash. Challenges in Japan, meanwhile, proved "insurmountable."
The online auctioneer said the purchase would give it access to Taiwan's 6.5 million Internet users and give NeoCom's users an enhanced Web site and broader selection of goods. NeoCom has been around since 1998, and operates two sites, uBid.com.tw and Bid.com.tw.
Aside from $9.5 million in cash, eBay will also pay an amount to be determined when the deal closes.
eBay said the purchase would shave about a penny from its second-quarter earnings per share on a pro forma and generally accepted accounting principle (GAAP) basis. The company now expects earnings of between 31 cents and 32 cents per diluted share in the first half of 2002, and between 69 cents and 72 cents a share for the full year 2002.
eBay said it doesn't expect the deal to affect its 2002 net revenue.
Separately, eBay has said it would exit the Japanese market, laying off all of its 17 employees in that country and closing down the auction site, which had about 25,000 listings.
"Despite the hard work of eBay's team in Japan, we simply believe the issues eBay is facing there are insurmountable without changes in the Japanese market," said eBay spokesman Kevin Pursglove.
The biggest challenges, Pursglove said, were eBay's late entry into the market, Japan's economic problems and competition from Yahoo Japan, which has "put itself in the leadership position." There had been speculation, after the company's fourth-quarter report that it would team with or buy another site in Japan to combat the problems.
"We will consider opportunities in the future for a return to Japan," Pursglove added.