Posted by: Kenji Hall on December 4, 2007
At first glance, eBay’s deal with Yahoo Japan, announced yesterday, seemed like the U.S. online auctioneer might be plotting a return to Japan. You’ll recall that five years ago a humiliated eBay quit Japan after a failed two-year attempt to take on heavyweights Yahoo Japan and Rakuten.
But this time eBay is playing it smart. The San Jose, Calif. company’s tie-up with Yahoo Japan is less a comeback than a shrewd move to tap into the Japanese market without having to start from scratch.
The eBay-Yahoo Japan deal creates a virtual trans-Pacific trading pool that links the $170-billion U.S. and $36-billion Japanese markets. By next March, consumers in Japan will be able to use the Yahoo Japan site to bid for items sold on eBay in the U.S. eBay customers in the U.S. will get a channel to buy stuff from the Yahoo Japan site by the middle of next year. A separate site, called Sekaimon (“Door to the World”), will help translate items on eBay into Japanese as well as simplify the process of overseas shipping and customs.
That’s good news for anyone who knows the frustration of trying to buy or sell an item online to someone overseas. Ultimately consumers will benefit from having a legitimate cross-border search and payment system that works seamlessly with the auction service they’re already familiar with. That should also reduce the huge markup in prices for hard-to-get items that has been a hallmark of these types of transactions.
Both companies have a lot to offer. Yahoo Japan says its site has more than 15 million items and accounts over half of this country's online auction market. eBay’s site is considered the world's biggest with nearly 250 million registered users.
Of course, the deal wasn't entirely unexpected. Last year, Yahoo and eBay agreed to an alliance spanning everything from advertising to online payments in the U.S. That tie-up was designed to give both a better shot at holding their own against rivals such as Google and Microsoft.
This week's announcement is the first with an overseas element. It's great news for Yahoo, which owns one-third of Yahoo Japan, because the Sunnyvale, Calif.-based company had just closed its auction sites in the U.S. and Canada in June, ending a nine-year run. And while it still had online classifieds as well as shopping and auto sales sites, the closure had left it with limited services. And since eBay also owns such gems as online telephony service Skype and payment system PayPal, this could be only the start of a soon-to-be-global partnership.