eBay Teams with TOM Online

eBay Inc. and TOM Online Announce Joint Venture Agreement on E-Commerce in China

SAN JOSE, Calif.,/SHANGHAI and BEIJING December 19, 2006 – eBay Inc. (Nasdaq: EBAY) and online portal and wireless Internet company TOM Online (Nasdaq: TOMO; Hong Kong GEM: 8282) today announced a joint venture agreement that will set the foundation for the next phase of growth of e-commerce and m-commerce in the rapidly growing Chinese market.

eBay EachNet, eBay Inc.’s China-based subsidiary, and TOM Online will combine expertise to build a new China marketplace in 2007. The new marketplace will bring together the strengths of both companies – eBay EachNet’s global e-commerce knowledge and large and active trading community in China, and TOM Online’s local market knowledge and active wireless user base of more than 75 million.

The new marketplace will bring enhanced online and mobile opportunities to buyers and sellers in China, evolving eBay’s participation in China and extending TOM Online’s wireless service portfolio into m-commerce. Upon the launch of the new marketplace, eBay EachNet users will be invited to transition to the new site, and TOM Online will work to deliver its user traffic to the site as well.

"eBay has helped pioneer e-commerce in China, and by combining our expertise with that of a strong local partner like TOM Online, we are even better positioned to participate in this growing market,” said Meg Whitman, President and CEO of eBay Inc. “This agreement is a sign of our continued commitment to delivering the best online buying and selling experiences in China."

“eBay is one of the world’s most recognized e-commerce brands and TOM Online has a proven track record of delivering outstanding services to Chinese consumers,” said Wang Lei Lei, CEO of TOM Online. “The new online marketplace to be built by the joint venture will provide an enhanced user experience, tailored for the China market, and will capitalize on our companies’ strengths in the emerging m-commerce sector."

eBay will have a 49% stake in the joint venture, and TOM Online will have a 51% stake.

Both companies will make financial contributions to the venture, including a US$40 million cash contribution from eBay and US$20 million in financing from TOM Online. If mutually agreed, the two companies can equally share in an investment of up to an additional US$10 million. In addition, eBay will also contribute its EachNet subsidiary, while TOM Online will contribute local management expertise, technology, and brand. The formation of a joint venture will foster synergy among user communities and distribution channels, enhance rapid product innovation capabilities on a local platform, and promote mobile integration.

China has an Internet population of 123 million Web users as of June 2006, which grew by 19% over the last year, and the country has more than 400 million mobile users. The China eCommerce market is experiencing explosive growth, and could rise to 46 billion yuan in value next year, from 5.6 billion yuan last year, according to IResearch. By working together, eBay and TOM Online will improve their ability to tap into the potential of new online commerce trends in China. This new venture builds on the existing relationship between TOM Online and Skype, eBay Inc.’s online communications business.

Wang Lei Lei will be chief executive officer of the JV, and drive the vision for the new local, China marketplace. eBay EachNet CEO Jeff Liao will provide management support from eBay to the JV. Liao will also continue to lead eBay’s separate operations in China, including the expansion of eBay’s business efforts in China to promote global trade by PRC-based sellers, as they ramp up their trading practices with people around the world.

eBay will also continue to grow the China Development Center for worldwide product development under the local leadership of recently appointed General Manager Daniel Lee, a former Yahoo! Asia CTO. eBay Inc. expects to continue to increase headcount in China into 2007 as it evolves its presence in the market.

eBay does not expect this partnership to have a material impact on eBay’s financial guidance as issued in connection with its third quarter earnings release on October 18, 2006.

Source: eBay Inc.