eBay to Shut Chinese Auction Site

It will enter a joint venture inside the country.
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Online auction giant

eBay

(EBAY) - Get Report

is planning to close its main Web site in China, according to

The Wall Street Journal's

online edition reported on Monday afternoon.

The move, which will be announced as soon as Tuesday, will entail eBay's replacing its site with one run by Chinese firm

Tom Group

(TOMO)

, the paper reported, citing people familiar with the matter.

Under the new arrangement, eBay will hold a 49% stake in the new site with Tom Group holding a 51% share. eBay does not plan to lay off any employees as part of the new setup.

The move could be read as a setback for eBay, which has struggled to stay in place in the face of intensifying competition in China. "We believe we're actually maintaining share in what is becoming an even more competitive market," said eBay CEO Meg Whitman during the company's third quarter conference call. "There are many new entrants in the business, but we feel pretty good about where we are."

Whitman said at the time that eBay was committed to China in the long-term, but refused to discuss whether the company would consider partnering with a local Chinese company as part of its future strategy.

Still, eBay's China site totals less than 3% of its overall listings, according to a Deutsche Bank figure noted in the

Journal

report.

eBay wasn't confirming the move. "We don't comment on rumors," Hani Durzy, eBay's director of corporate communication, wrote in an email response to an inquiry about the report.

Shares of eBay closed Monday off 1.5% to $32.42.