Last week, the NASDAQ halted trading on the shares of TOM Online, Inc. (NASDAQ:TOMO). That's always nerve-wracking for investors. However, in the case of TOM Online, it looked like the company was going private, which of course, is a good thing.

Today, we got confirmation. TOM GROUP will indeed buy out TOM Online for about $200 million. On the news, TOM Online's stock was up 26% to $14.64. While this sounds good, let's not forget that within the last year, the stock was as high as $28.89.

Tom Online has two joint ventures with eBay Inc. (NASDAQ:EBAY) and eBay's Skype but its main business is the Chinese wireless data market. While this has lots of potential, it is still in its early stages, at least in terms of monetization. This has certainly been a problem for TOM Online.

The recent fall-off in the Chinese equities markets was not helpful either.

TOM Group already owns about 65.73% of TOM Online already, making the probablity of another bidder quite slim. In other words, it holds all the cards. The complex Chinese regulations doesn't make it easy to buy companies there either.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Yesterday, Google Inc. (NASDAQ:GOOG) announced it had reached an agreement with China Mobile to offer mobile users Internet search services. Today, the world's largest search engine, said it is partnering with a Chinese venture capital firm to buy a stake in China's Xunlei Network Technology Co., a file-sharing provider among other services. The details might be announced soon.

Xunlei is reported to have more than 50 million visitors a day and 80 million users who have already installed the company's software. Google will provide its search technology to services offered by Xunlei.

These recent steps taken by Google definitely show that China is becoming a priority and a focal point for the search giant. Up until now, most western companies have had considerable difficulties breaking into the Chinese Internet market. Yahoo! Inc. (NASDAQ:YHOO) gave up control as it bought a 40% stake in Alibaba; eBay Inc. (NASDAQ:EBAY) recently made a similar deal with Tom Online Inc. (NASDAQ:TOMO).

As far as Internet search goes, Baidu.com Inc. (NASDAQ:BIDU) is said to have 57% to more than 60% of the Chinese market while Google has only 16% of that market.

With Google holding a commanding (and ever increasing) lead in the North American Internet search market, its market share growth rate could begin to dwindle soon as it captures most of the market. Google is no doubt looking for other growth opportunities and what better than the second largest Internet market (in terms of users) in the world? With that in mind, Google's latest actions in China make perfect sense.

Question is -- can Google do what others have failed to do to it and beat Baidu -- "the Chinese Google"?

I know this is old news, but it came out during the holidays so I thought it's worth a mention in case others, like me, have missed it before. It is also -- I think -- good news for eBay Inc.'s (NASDAQ:EBAY) operations in China. Well, it seems that Alibaba.com, China's largest e-commerce company and eBay's main rival there, will soon also start charging certain fees. (Apparently, giving away services for free isn't a good revenue source).

Specifically, starting February 2007, Alibaba.com (owned 40% by Yahoo! Inc. (NASDAQ:YHOO) will charge users of its (now) free Alipay online payments service. It will only charge, however, those users who don't do business on Alibaba's auction site, Taobao. The fee Alipay will begin to charge was not disclosed but sources say it will be 1.5% of the total value of each purchase. While Alipay and Taobao contribute less than 20% to Alibaba's revenue, Jack Ma, Alibaba's founder and chairman, hopes this figure would be 30% by 2010.

eBay's online payment system, PayPal, started operating in China last year and it was rumored, especially after eBay's recently announced joint venture with Tom Online Inc. (NASDAQ:TOMO), that PayPal would work on a similar venture. Whitman, eBay's CEO, dismissed the rumor.

Why do I think Alibaba charging fees is good for eBay? Well, right now eBay's main problem in China is fees. eBay competes against free services while it charges its users fees. As more companies come to the realization that they need to charge fees, eBay's position in this potentially growth market could only improve. Of course, this step by Alibaba is small and a far cry from charging full scale fees, or from Taobao charging fees, but it might indicate the beginning of a trend.

When I had first heard about eBay Inc.'s (NASDAQ: EBAY) attempt to build an eBay branded auction platform in China I was just about screaming at my monitor, "No no no, they'll never accept you like that!!!" I knew better than to think that trying to establish an eBay branded platform would work there in any manner or fashion. The girth of my protests was documented both on eBay's discussion boards and (I believe) here on BloggingStocks comments also. Too bad Meg and crew didn't hear my pitiful whining. I could have saved them some lost time and some major bucks. Now, in a bold and somewhat clever move, eBay has purchased into a joint venture with the Chinese mobile Internet portal Tom Online Inc. (NASDAQ:TOMO). Well, better late than never!

Tom Online is a Chinese owned multimedia company that holds a leadership position in wireless Internet services. Some of the company's involvements include: wireless Internet, interactive voice response systems, online advertising, search, advanced email, gaming and entertainment. TOM Online is a subsidiary of TOM Group Limited, a leading Chinese language media group in the Greater China region. The company has a demographic focus towards the young and mobile trend seekers.

This is a move by eBay that I like.

"If you want what you never had, then do what you have never done."

I don't know to whom to attribute that quote. It was on a T-shirt my niece was wearing when we went to her home for Christmas dinner. When I saw it, it hit me like a warm balmy breeze on a cold December day. Those are the simple words which I have never condensed into such a simple statement, yet they are representative of the dynamics which have colored my life. Yes, I'm that guy you never really got to know when you worked with him or went to school with him. I'm that guy who was "over there". I'm that guy who fights against conventional wisdom. It's not because I can't buy into the concepts of what already works. It's a matter of a bull headed refusal to be limited by a blind acceptance of the status quo. What already works isn't always good enough to satisfy me.

That's my position on eBay, Inc. (NYSE: EBAY). As a matter of fact, what already works over there doesn't seem to be working so well these days. I received an unofficial report today that as of Dec. 24, 2006, eBay listing count has dropped below 10 million. If that's true, it equals an over 30% decrease of average listing volume in the last quarter. This does somewhat mimic historical performance over the last three years.The most up-to-date figures that I can get which I trust are from medved up to Dec. 16, which show eBay listing volume at about 14.3 million on that date. In any case, based on my tracking of the numbers, things aren't really too good on eBay for overall listing quality and volume. The numbers over the next 30 days will tell the story as to the true effects of the eBay "revolutionaries" on that site and their future. If there is not a significant jump in listing volume beginning in January, be ready for some heads to roll.

eBay Inc. (NASDAQ:EBAY) is supposed to announce a deal with Tom Online Inc. (NASDAQ:TOMO) today. It's been long time coming. Anyone who has been following eBay closely the past year, has also been aware of the occasional rumor surfacing regarding a potential deal involving eBay China with the usual suspect being Tom Online.

Quite frankly, I'm surprised by the Wall Street Journal title: EBay Steps Back From Asia, Will Shutter China Site, or by the New York Times title: EBay Is Expected to Close Its Auction Site in China. I guess I've been expecting exactly such a deal so I don't see it as a retreat from the Chinese market, but as a change in strategy. And when a strategy isn't working, as was the case for eBay Eachnet in China, a change is welcome.

According to sources, no job cuts are planned, furthering the idea that this move is a strategic shift aimed at strengthening operations in China, not an exit strategy. This isn't another Japan where eBay bowed out to Yahoo! Japan.

True, eBay will close its primary Chinese site and pay about $40 million for a 49% stake in a new venture with Tom Online, a Beijing-based Internet company, ceding control of its China operations. Tom Online will then operate the site and maintain a 51% stake in the new site. But investors have to consider that eBay wasn't doing well in China, a market touted by Meg Whitman, eBay's CEO, as a major part of eBay's future.

eBay Inc. (NASDAQ:EBAY) has decided to get out of China, at least in terms of operating its own local language site [subscription required, alternate]. Chinese who buy from eBay sites outside the country will still deal with eBay.

Chinese portal Tom Online will operate a new auction site that will be a joint venture with eBay. Tom will own 51%.

The Wall Street Journal said that the move is a defeat for eBay. That is short sighted. Tom has a significant presence in China and knows the local markets. Half a loaf is better than none.

There is a wisdom in eBay's decision, and it will probably be evident fairly quickly.

Douglas A. McIntyre is a partner at 24/7 Wall St.