Yahoo and eBay: My big fat geek wedding

You can tell the adolescent Internet industry is growing up — look how important relationships have become. This morning Yahoo and eBay announced a multi-year strategic alliance that will position them against common threats: Google and Microsoft. The deal — under which Yahoo will provide all the graphical ads on eBay, eBay’s PayPal division will handle Yahoo’s online wallet service, and the two companies jointly develop click-to-call telephone services — confirms recent speculation the two companies would pair up to better compete with the Google-AOL alliance and Microsoft, which is still going stag. Indeed, it was just Monday that JP Morgan published a report saying the two made a cute couple. “A partnership or merger between eBay and Yahoo is strategically feasible,” the report explained (PDF). “A combined company would have the leading position in auctions, communications, payments, graphical advertising, audience reach, and geographic breadth.”

For eBay, hooking up with Yahoo will greatly reduce its dependence on Google referrals as a source of traffic at a time when the search juggernaut is nibbling at eBay’s business with its free online-classified service, Google Base. For Yahoo, it’s a means of extending its sponsored search and advertising to eBay’s legions of shoppers. A win-win, I think.

 
 

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  • Great headline!

  • Ebay and Yahoo have a truly massive cost disadvantage as they rely upon standard enterprise servers and storage. Google’s GFS gives them a 60% cost advantage on every user. See more at StorageMojo.com

    The marketing advantages are real, but if Google wakes up and starts leveraging their cost advantage the marketing advantages won’t be able to hide the infrastructure problem.

  • Laila

    Why stag?

    Didn’t you notice how A9 abandonded google for Windows live?

    I expect more MSAmazon.

 
 
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