Yahoo! and eBay take on might of Google

26 May 2006

Internet players Yahoo! and eBay have joined forces in a new deal which looks set to step up the competition against search engine giant Google.

Under the terms of the agreement, Yahoo! will exclusively sell advertising on eBay while eBay will offer its PayPal payment service on the Yahoo! site. The deal also includes a co-branded tool bar and testing of a click-to-call functionality.

Work will begin on the new initiatives this year with full implementation expected by 2007. The alliance comes in light of Google’s newly announced plans, which include bundling of its software on Dell PCs. Both companies are insisting they didn’t enter the deal to compete with Google. EBay currently partners with both Google and MSN and says it will continue to do so.

The deal gives Yahoo! and eBay greater presence and access to a wider audience in a highly competitive market place. Announcement of the new partnership saw the share prices of both Yahoo! and eBay soar, with little change in Google’s stock.

By Lisa Matassa