The move will see Yahoo! close five European auction sites, including the UK and Ireland site as well as France, Germany, Italy and Spain. The closure is being seen as an admission of defeat for the portal and a boost for eBay.
Yahoo! has trailed badly in third place in much of Western Europe behind dedicated auction sites eBay and QXL Ricardo.
However, Yahoo! will continue to operate its own auction sites in the Scandinavian countries of Denmark, Sweden and Norway, where Yahoo!'s market position is stronger.
According to a spokesman for Yahoo!: "There are other areas that are growing faster and more profitably than European auctions for Yahoo!."
Under the terms of the deal, eBay will pay Yahoo! an undisclosed sum over the course of a multiyear agreement to promote eBay's European auction sites through banner advertisements, text links and other promotions.
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