- eBay will carry Yahoo! ads, making Yahoo! advertising the exclusive provider of banner advertisements on the eBay website.
- Yahoo! will enable its users to conduct searches of eBay auction and sale listings, a move that will expand the e-commerce reach of eBay and its auctions beyond the eBay website proper.
- Yahoo! will tie its ecommerce activity to the eBay-owned PayPal payments service, enabling thousands of stores and websites affiliated with Yahoo! to easily offer customers the option of paying for goods and services using PayPal.
- Yahoo! branding and search will be added to the eBay toolbar, a browser addon that already enjoys market penetration in the millions.
The relationship comes as eBay becomes increasingly worried by Google's entrance into markets that compete with eBay's core properties and holdings (including PayPal, Craigslist, Skype, and the eBay website itself), and Yahoo! struggles to outflank the growing popularity of both Microsoft Network and Google as consumer search options.
Despite the move, both properties must still cope with the reality that Google remains responsibile for driving a large percentage of the visitors to auction listings, stores, and affiliated websites on throughout both the eBay and Yahoo! Properties.
What It Means For You
This alliance appears to pit Yahoo!, eBay, and related holdings (including PayPal, Craigslist, and Skype) solidly against new offerings from Google such as Google Base, Google Talk, and the forthcoming Google Payments. Though Google's offerings don't yet have either the polish, the reach, or the depth of eBay, Google's web-wide dominance in other areas ensures that they'll become major players in time.What appears to be shaping up for the first time in several years is real consumer choice between online auctions and payments services. For consumers, it's a mixed bag. Choice is always a good thing, but if current relationships (or the lack thereof) form a new status quo, smaller or single-item sellers will also be forced to choose between sites when listing items for sale.
The divide in the payment and communications sectors poses the same difficulty, creating an online split that will essentially force users to either choose between one half of the web or the other for e-commerce or to register for and maintain accounts at multiple payment and communications networks.
What's clear is that despite its dominance in other areas, Google has a long row to hoe before being able to challenge eBay in its two core offerings, online auctions and payments processing. Meanwhile, Microsoft's own web offerings, now on the outside looking in, will find themselves in increasing need of strategic partnerships in order to remain competitive.
