Ebay Pulls The China Plug (TOMO)(EBAY)

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Ebay has decided to get out of China, at least in terms of operating its own local language site. Chinese who buy from Ebay sites outside the country will still deal with Ebay.

Chinese portal Tom Online will operate a new auction site that will be a joint venture with Ebay. Tom will own 51%.

The Wall Street Journal said that the move is a defeat for Ebay. That is short sited. Tom has a significant presence in China and knows the local markets. Half a loaf is better than none.

There is a wisdom in Ebay’s decision, and it will probably be evident fairly quickly.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.