economy - Ebay dishes out 100 m USD in China


Ebay seems to be the next foreign investor to discover that it is very easy to spend money in China, but a bit harder to earn it back. China Net Investor points me at this analysis of the 100 million US dollar the company is going to spend in China in 2005, causing the company to miss its financial targets for an investment they are unlikely to earn back.

"They overpaid for a subpar company in China and now they are going to dump
a huge sum of shareholders money into a Chinese wormhole. They would be
better off dividending that cash to shareholders and pulling out. But Ebay
management has China fever, so it won't happen," says Bill Biship, co-founder of CBS MarketWatch.

Losses were already visable at the end of last year, the Ebay tried to outspend its domestic competitors. A strategy that has been fatal for many other foreign invested companies in other strategies.