PChomeeBay to take on Yahoo-Kimo

PC Home Online (網路家庭) and eBay Taiwan unveiled their online auction venture yesterday, aimed at challenging Yahoo-Kimo Inc's (雅虎奇摩) lead in the market by providing consumer-to-consumer service for free.

With registered capital of NT$300 million (US$9.14 million), PChomeeBay Co (露天市集) will launch a beta version of its Web site on Sept. 25, and start integrating PC Home and eBay Taiwan's accounts next month, Simon Yeh (葉奇鑫), chief executive officer of PChomeeBay, said during a media briefing.

PC Home and eBay users can log onto the new auction site with their original accounts and passwords, but eBay users might have to change their user names if those are identical to ones being used by PC Home users.

Benefiting from Yahoo-Kimo's new charge scheme, the number of listings in PC Home has surged from 50,000 to 740,000 in less than two months, escalating so fast the the company's server once crashed, Yeh said.

Yahoo-Kimo began charging sellers a transaction handling fee this month -- 3 percent of the concluding price -- on top of a listing fee of NT$3 per item. The charge outraged many users, who have shifted over to the free PC Home auction site.

"There shouldn't be a single player to dominate the market, or there could be price manipulation," Yeh said.

PChomeeBay expects its listings to hit 1 million items next month, and hopes to boost its traffic to 2 million listings within one year of operation, a figure that Yeh said would post a threat to Yahoo-Kimo's current 3 million.

Yeh, who previously worked as the transaction safety officer at eBay Taiwan, said that eBay had triumphed in many countries but had troubles in Taiwan because of a lack of flexibility.

"Consumers' demands vary in different countries, but eBay has a hard time adjusting to the needs of local users because it has to stick to the uniform interface and services the company provides in the world," Yeh said.

The new company will take advice from users and make its service simple and friendly, he said.

Yahoo-Kimo has had the lead in the online auction market because it is the nation's major Internet portal, but PChomeeBay will have the edge once PC Home, the nation's fourth-largest portal, comes on board, Yeh said.

PC Home chairman Jan Hung-tze (詹宏志) and president Arthur Lee (李宏麟) hold the same positions in the new joint venture.

Jan refused to reveal the holdings of each company in the new firm. Of the five board seats, PC Home took three and eBay got the other two, Jan said last month.

Jan also refused say how much loss the new venture took on from eBay, or how much money PC Home has given the new firm.

PC Home saw sales increase 45.78 percent to NT$543 million in July. About 70 percent of its revenue comes from online shopping.

Since PC Home also runs several online businesses -- including Internet telephony Skype and virtual stores -- it is considering integrating the tools and information to facilitate the auction site, as well as forming a community to attract more users, Jan said.

Shares of PC Home closed down NT$0.75 at NT$33.25 yesterday.