Silicon Valley companies have struggled mightily in China. Google, the world's largest search engine, is a distant No. 2 in Web search, despite
opening new operations in China last year. Yahoo, frustrated by its efforts overseas, sold its majority stake in Yahoo China to Chinese ecommerce giant Alibaba.
Analysts weren't surprised, as China's expanding market has proven a tough one for U.S. Web companies to crack. Caris & Company analyst Tim Boyd said the move was "an admission that [eBay] failed in China, on their own at least. But I think that's something the market already knew." EBay had been steadily losing market share to Taobao, the consumer auction unit of Alibaba.com.