Baidu Inc. and eBay EachNet announced Wednesday a multi-year agreement to cooperate in advertising, on-line payment and co-branded toolbar.

According to the agreement, Baidu will promote PayPal, an online payment tool by eBay EachNet, as the preferred on-line payment method on Baidu. In return, Baidu will become the exclusive provider of text-based search advertising on eBay EachNet, eBay's China subsidiary and a leading e-commerce company in China.

This agreement provides Baidu advertisers with access to one of the most robust on-line communities in China, said a spokesman with Baidu.

The two companies plan to begin testing the text-based search advertising on eBay EachNet in the first quarter of 2007 and expect to have the full implementation in place during the second quarter of 2007.

Additionally, eBay EachNet and Baidu will develop a co-branded toolbar designed to leverage each other's expertise in on-line safety.

Chang Yanjie, analyst with China Center for Information Industry Development, said that Baidu tended to develop towards B2C and would offer more services targeting individual netizens in the future.

The cooperation also indicated that eBay EachNet would not withdraw from the Chinese market as expected before and PayPal would be its key business in China.

Baidu and eBay Eachnet started cooperation in 2000 and they are mutually attracted by the high traffic population with one being the world largest Chinese searching engine and the other most active e-commerce community in China.

Both companies said the agreement would not affect their financial results during the period of the service agreement.

(Xinhua News Agency November 9, 2006)