Posted June 22, 2007 9:41 am by with 5 comments

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This morning I read an interesting theory by Tim Poulus at Seeking Alpha: Yahoo/eBay Merger Case Strengthened By Semel Departure. Hmm… very interesting. How would merging help both Yahoo and Ebay?

I think one of the most obvious benefits to Yahoo would be an immediate acquisition of an online payment tool — PayPal. Just this week, Ryan Douglas pointed out on a Marketing Pilgrim post that Internet Retailer is reporting that adoption rates of Google Checkout amongst the top 500 retailers than PayPal. But Yahoo doesn’t even have a proverbial dog in the online payment fight yet. Could a merger between Yahoo and Ebay further empower the PayPal tool — linking it up with Yahoo Search Marketing ads similar to how Google Checkout is linked to Google AdWords?

Certainly for Ebay auctions and storefront owners, there’s unlimited potential for new traffic from Yahoo. While Yahoo shopping provides another portal for selling products, today participation in Yahoo Shopping requires additional work by the Ebay seller — adding products to Yahoo Shopping separately from Ebay. Ebay’s offerings, specifically from stores, could dramatically increase the product offerings in Yahoo Shopping overnight.

I haven’t heard anything even remotely concrete on this rumor yet, but I do think that a merger of this nature might be a good move for both Yahoo and Ebay.