Yahoo and eBay Form Alliance




Hot off the press comes news that Yahoo and eBay are forming a partnership, designed to help both parties take on Google and Microsoft.

Text below is from the press release…

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Search and Advertising:

Yahoo! will become the exclusive third-party provider of all graphical advertisements throughout the eBay.com site, and sponsored search for complementary products on some eBay.com search results pages in the U.S.

Yahoo! already provides a broad and deep array of essential services to an extremely engaged audience around the world. Through this partnership, Yahoo! can expand upon these strengths with the addition of eBay.com’s high quality online inventory, offering advertising clients an optimal marketing experience.

Yahoo! and eBay have also agreed to collaborate on ways to increase the quality and comprehensiveness of Yahoo! Web search results for eBay.com and to provide Yahoo! search users with more up-to-date listings from the millions of products on the eBay.com marketplace, with the goal to create a better search experience by enabling shoppers to more easily find relevant eBay listings.

Integrated Commerce Payment System:

Yahoo! has selected PayPal to become the exclusive third-party provider of its online wallet — allowing customers to pay for Yahoo! services from bank accounts, credit cards or balances associated with their PayPal accounts. PayPal, which has 73 million accounts in the U.S., also will be deeply integrated on the Yahoo! site and will receive prominent positioning when users purchase Yahoo! services across its network. This offering will provide Yahoo! consumers with additional online payment choices and the option to use PayPal across the entire Yahoo! network.

PayPal will be integrated and promoted as Yahoo!’s payment solution to Yahoo!’s merchants and publishers, which includes the Yahoo! Publisher Network, Yahoo! Search Marketing, Yahoo! Merchant Solutions and other small business services.

Co-Branded eBay Toolbar:

Yahoo! Web search functionality and Yahoo! site links, including the Yahoo! Home Page, Yahoo! Mail and My Yahoo!, will be integrated into a co-branded version of the eBay toolbar. The eBay toolbar has been downloaded by more than four million eBay users to date, and lets consumers quickly link to preferred eBay locations while offering enhanced online protection. This new co-branded toolbar will make it even easier for consumers to take advantage of both companies’ offerings to quickly access information wherever they are on the Web.

“Click-to-Call” Advertising Functionality:

Yahoo! and eBay will explore developing and deploying “click-to-call” advertising technologies on their respective Websites in the U.S., accessible by users of both Yahoo! Messenger with Voice and Skype.

“Click-to-call” is a product feature link included inside an advertisement that consumers can use to directly call that advertiser to pursue a transaction.

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When you look at the partnership areas proposed, it’s clear that Yahoo and eBay are joining forces in order to take on Google. I think eBay could have partnered with Google on just about all of the areas listed, except one, PayPal. I think this is the key to why eBay is threatened by Google. With Google implementing it’s own payment system, it’s clearly making a bold attack on eBay. Yahoo doesn’t have its own payment system, so is not a threat to eBay and will actually benefit from having access to PayPal – allowing it to compete with Google too.

Thanks to Cindy!