Stop press! eBay and Yahoo! strike deal!

May 25, 2006

Topics: Blogging.

All over the blogosphere the news is flying that Yahoo!! and eBay have struck a deal with major potential. The core of the deal is that Yahoo! will now be the sole provider of graphical advertising for eBay and that Yahoo! will promote and use eBay’s payment service, PayPal.

This doesn’t yet appear to have changed eBay’s heavy use of AdWords to advertise their sales on Google. It’s unclear whether it would, since Google is still leading Yahoo! by quite a healthy margin in the search arena. Abandoning that advertising source may be a significant loss of traffic for eBay at this point.

This deal is being touted as a significant alliance against Google by some sources, although it seems clear that it is just as much an alliance against Microsoft’s recent strategies as well.

Specifically, Yahoo and Ebay will be sharing some of their core assets to increase the reach of both networks. For example, Yahoo said it will become the exclusive third-party provider of all graphical advertisements throughout the Ebay site, Ebay will be providing "more up-to-date listings" from its online auctions to Yahoo, Yahoo will improve Ebay’s search functionality and both firms will offer a co-branded "Ebay toolbar" to their users.

Wolfgang Gruener, TG Daily

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