EBay Decision Shows the Importance of Connections in China – Keith Bradsher

From International Herald Tribune:

The eBay decision to close its Web site in China and instead take a 49 percent stake in an electronic-commerce joint venture with TOM Online is the latest sign that local knowledge and connections matter in the Chinese market.

While TOM Online has suffered a series of commercial setbacks during the past three years, no one questions that it knows the Chinese market and has political influence.

TOM Online has been a fairly small, struggling company until now. It earns 89 percent of its revenue from providing cellphone services, mainly sending the latest entertainment news and weather in short text messages or multimedia messages to cellphone users. Most of the rest of its revenue comes from advertising on a Yahoo-like Internet portal that specializes in Chinese entertainment news.[Full Text]

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