Yahoo to Partner with eBay, Will Integrate PayPal Payment Service

AuctionBytes.com

May 25, 2006

eBay and Yahoo announced a multi-year strategic partnership consisting of four components in the areas of search and graphical advertising, online payments, a co-branded toolbar, and the opportunity to explore "click-to-call" functionality. They will begin to roll out the initiatives this year, including a testing phase that will take place over the next several months, with a plan to achieve full implementation in 2007. Yahoo and eBay do not expect this relationship to have a material impact on their financial results in 2006.

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 will also make PayPal the exclusive third-party provider of its online wallet. Yahoo will integrate PayPal on the Yahoo site and will promote PayPal 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.

eBay will integrate Yahoo Web search functionality into a co-branded version of the eBay toolbar, and the two companies 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.
eBay CEO Meg Whitman said, "Yahoo offers an engaged online audience, which drives massive traffic through its rich consumer content and premium services. Working together, we can create more exposure for our properties, which in turn makes them more valuable to our users."
Analysts have been talking recently about a possible alliance between eBay, Yahoo and Microsoft as the three try to stave off the threat of Google, which has launched potentially competitive ecommerce and payment offerings.