EBay, the largest online auctioneer in the world, will slash its spending on online advertising in the mainland after merging its local business into a venture with Tom Online, analysts said. 'We talked with some of the advertising agents in China. They said eBay is pulling back its advertising budget this year,' said Fu Xinghua, an analyst at Beijing-based market research firm Analysys. EBay is the largest online advertiser in the mainland and an important client for online portals and search engines, such as Sina Corp, Sohu.com, NetEase and Baidu.com. JP Morgan estimated eBay spent more than US$25 million on online advertising last year, accounting for 4 per cent of the total US$600 million in the mainland. 'With eBay pulling back its efforts in China, we expect it to significantly reduce spending in 2007,' said Dick Wei, an analyst at JP Morgan. Mr Wei expected eBay's spending cut would hurt most of the online portals, in particular NetEase, the country's third largest. 'As eBay is one of the largest advertisers for NetEase in 2006, we believe this would add pressure to NetEase's 2007 advertising growth rate,' he said. After failing to dominate the mainland market, eBay merged its local unit with Tom Online, the country's largest wireless valued-added service provider, to form a joint venture at the end of last year. 'This year eBay is more concerned with the restructuring than heavily promoting its website,' Ms Fu said. 'While this will have an impact on the industry, the spending growth of other advertisers will make up for the loss of eBay's budget.' Companies would lift their advertising budget in the second half this year for the Beijing Olympics in 2008, she said. Rae Huang, public relationship manager of Eachnet, the joint venture between Tom Online and eBay, said the company could not comment on its marketing strategies as it was part of its internal operation. 'Each year we change our marketing strategies according to our business focus,' Ms Huang said.