We could have done a much better job... in Japan

Kevin Pursglove, eBay

EBay's Japanese language site would be closed, the company said, and customers directed to its US based auction operations.

The site will close on 31 March and 17 jobs will be cut.

EBay admitted it had fallen behind Yahoo Japan, the market leader in the country.

Bad job

"Looking back... we could have done a much better job executing on our plan in Japan," company spokesman Kevin Pursglove said.

The online marketplace really becomes difficult to prosper in when you don't secure the first-mover advantage

Shawn Milne, SoundView Technology Group

EBay offers 25,000 products on its Japanese site, while Yahoo Japan has nearly 3.5 million items.

"The online marketplace really becomes difficult to prosper in when you don't secure the first-mover advantage," said Shawn Milne, an analyst at SoundView Technology Group.

"Cutting the losses and focusing on dominating elsewhere makes sense to me," he said.

Fighting for Asia

But eBay is intent on remaining in the East Asian market.

On Monday the company said it would buy NeoCom Technology, a Taiwanese online auction operator, for $9.5m cash.

EBay is one of the few successful internet companies, having seen its profits rising even amid the dot-com implosion.

The company is the number one auction site in all of the other 18 countries in which it operates.