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Yahoo and eBay join forces

Amy Scott May 25, 2006

KAI RYSSDAL: Imagine, if you will, a company called Yahoo-eBay-Microsoft-Google. Or maybe Microsoft-Yahoo-Google-eBay. We’re not there yet. But it sure seems like the big four Internet companies are doing more and more of the same thing. Searches on Yahoo. Talk of auctions on Google. And some more cross-pollination today. Yahoo and eBay are ganging up against Google. Yahoo gets to sell advertising on the world’s biggest auction site. And in return, eBay will steer users to the number two search engine. Marketplace’s Amy Scott has more on the ongoing quest for Web domination.

AMY SCOTT: The deal delivers millions of eBay users to Yahoo’s doorstep. Yahoo will have exclusive rights to sell banner ads on eBay’s website. Links to Yahoo’s search and email pages will appear on eBay’s downloadable toolbar. But analyst Rafat Ali says eBay walks away with the better deal. He says the popular auction site wants to boost revenue and a sagging stock price.

RAFAT ALI: This seemed to be the most logical way for it to firstly monetize itself, monetize meaning you basically get as much money out of every page view you have on your website as you can. And this seemed to be a better way of doing it. Where Yahoo would do all the work for them.

Plus, Yahoo will promote PayPal. That’s the online payment service that eBay owns.

Shares in Google fell at first. They rebounded when reports came out that Dell plans to install Google software on millions of its computers.

Clay Moran with Stanford Group says the Yahoo-eBay partnership isn’t a real threat.

CLAY MORAN: I don’t think it’s a negative for Google nearly as much as it’s a positive for Yahoo. And remember, there’s other players in this industry as well. So, you know, Microsoft may be the one that could lose share to both these guys. It’ll just be very interesting to see how things develop.

Microsoft isn’t above making a deal of its own. It’s reportedly trying to team up with one of the hottest Web properties, the social networking site Myspace. But then again, so is Google.

In New York, I’m Amy Scott for Marketplace.

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