The long-awaited mainland launch of eBay's online payment subsidiary comes as the company prepares to hold a press conference in Shanghai Monday, with global chief executive Meg Whitman rumored to be attending.

This is an important step for eBay in the mainland, as the biggest hurdle to the growth of China's e-commerce market has been the lack of a secure and convenient method of online payment.

PayPal is overdue in the mainland. Online business-to-business company Alibaba, which runs auctions Web site Taobao.com, launched its own online payment tool Alipay in October 2003.

Alipay now has over 2.4 million users. Alipay is also offered for free.

Expect competition between the two companies to get even more intense in the coming months as they fight for dominance in the payments market.

The launch of PayPal could also sound the death knell for independent online payment start-ups in China.

eBay completed its acquisition of China's leading auctions site Eachnet in mid-2003 with a total investment of US$180 million (HK$1.404 billion). Alibaba launched Taobao to compete with Eachnet in May 2003.

Taobao has been able to gain rapidly on Eachnet because its services are free. Eachnet, which charges commission on sales, now has 11 million registered users, compared with over eight million for Taobao.

There have also been rumors that eBay plans to appoint a new chief executive at Eachnet, a position that has been vacant since its founder Shao Yibo resigned in November 2004.

Another US Internet giant, Yahoo!, is moving into a transition period as Zhou Hongyi, president of Yahoo!'s China operations, announced his resignation this week. Zhou will step down August 31 when his contract expires.

While Zhou is officially leaving for personal reasons, the resignation comes after months of speculation about his future at Yahoo! The company has been struggling to establish itself in the country.

Apart from Yahoo!'s US$120 million acquisition of Chinese Internet company 3721 in November 2003, it has made few major moves. 3721, founded by Zhou in 1998, is a major player in the mainland's Internet market. The company provides a popular real name search, which allows Internet users to input Chinese characters directly into an Internet browser's address bar.

Zhou said this week that 3721 contributes a large portion of Yahoo! China's revenues.

Internet portals Sina, Sohu and Netease were all down slightly for the week going into Friday trading.

China Mobile got the attention of wireless value-added service providers this week. The nation's largest mobile carrier announced Tuesday that it is considering instituting new charging methods with some of its service providers.

These service providers, which include Sina, Linktone and Tencent, receive 85 percent of the revenue generated from mobile services that are sold to China Mobile users. The services include mobile phone ring tones, wallpapers, mobile games and other wireless services. The rest goes to China Mobile.

China Mobile is considering changing the revenue share model to a 30:70 (with 30 percent going to China Mobile), or 50:50 model with smaller service providers that do not have their own customer service and marketing abilities. Agreements with larger service providers would be unchanged.

China Mobile has said it is considering making changes to the revenue share plan for some time now, and if it does make a change, it will have to shoulder more marketing responsibilities for value-added services.

Service providers will also lose some of the incentive to develop innovative new products if they see less revenue from their services.

China Mobile closed down 4.8 percent for the week in Hong Kong to HK$27.55 on Friday.

Pure play wireless value-added service providers Kongzhong and Hurray were up slightly going into the final trading day of the week, while competitor Linktone was down slightly.

Internet portal and wireless value-added service provider Tom Online's Hong Kong listed shares closed flat for the week. China's instant messaging leader and wireless value added service provider Tencent closed up 2.5 percent for the week to HK$6.05. Online gaming company The9 was up 2.8 percent for the week going into Friday.

The9 announced Thursday that it had gained complete control of the exclusive license from Vivendi Universal Games to operate World of Warcraft in the mainland. The9 gained the exclusive rights by purchasing China Interactive's 31 percent stake in the two companies' joint venture, China The9 Interactive Limited, which owns the license to operate World of Warcraft in the mainland.

World of Warcraft has proved to be the blockbuster many expected it to be, and The9's purchase of the complete rights to the license means that revenues generated from the game, minus royalties paid to Vivendi, will go to The9.