Yahoo!

(YHOO)

said Thursday it will abandon its Internet auction business in Europe and will instead promote

eBay's

(EBAY) - Get Report

services.

According to

The Wall Street Journal

, in addition to closing its auctions shop, Yahoo! has signed a multiyear, multimillion-euro marketing alliance with eBay to promote that company on Yahoo's portal pages as the preferred site to trade goods.

Yahoo! said the decision was made in part because it would be too expensive for the company to attempt to catch up with its competitors, namely eBay and

Amazon.com

(AMZN) - Get Report

, which lead the online auction business in most European countries by a substantial margin. Yahoo believes it would be better served by focusing on its core businesses.

Employees working in Yahoo!'s auction division will be moved to Yahoo! Shopping and Yahoo! Travel.

Shares of Yahoo! closed Wednesday at $16.27. eBay was up about 1% to $55.75 in preopen trading on the news after closing at $55.25 Wednesday.