eBay Takes Control in Europe - TheStreet

You have Japan, we'll take Europe.

With

Yahoo!'s

(YHOO)

decision to exit the auction business in Europe, online auction giant

eBay

(EBAY) - Get Report

has cemented its position as the dominant player there. Yahoo!'s dwindling auction business is left with Japan, the only market it dominates. eBay, meanwhile, exited Japan in February, conceding that market to Yahoo!.

According to

The Wall Street Journal

, Yahoo! also struck a multiyear marketing alliance to promote eBay on its Web sites in Europe. Yahoo! will halt its auction business in the U.K., Ireland, France, Germany, Italy and Spain, the newspaper reported, while maintaining operations in Denmark, Sweden and Norway.

The deal will have little financial impact for eBay, because it already dominated online auctions in the region, say analysts.

"There's one fewer competitor," says Thomas Underwood, who covers eBay for Legg Mason. "But no one was using the competitor, so I don't know that it will impact either business." (He has a market perform rating on eBay because of its premium valuation, and his firm does not have a banking relationship with the company.)

eBay was able to grab the European market with two key acquisitions. First, in 1999, the company bought Germany's Alando. In a much larger move, last year eBay bought France's iBazar for about $112 million in stock. That deal eliminated a key competitor for eBay and gave the company footholds in Belgium, Brazil, France, Italy, the Netherlands, Portugal, Spain and Sweden.

eBay shares were up $1.60, or 2.9%, at $56.85, while Yahoo! was up 51 cents, or 3.1%, at $16.78.