Yahoo and eBay join forces to take on Google

Internet giants form a strategic alliance

25 May 2006 17:27 GMT / By Amber Maitland

The 'net has been buzzing with rumours from Wall Street that a big merger between rival internet companies is brewing.

The partnership announced today between Yahoo! and eBay is just that: a partnership, not a merger. Not only does it indicate a close working relationship between the two companies, it may also indicate a united front against competitors Google and MSN.

eBay and Yahoo! will work together in the areas of search and graphical advertising, online payments, a co-branded toolbar, and the opportunity to explore "click-to-call" functionality.

In plain language, this means that Yahoo! will become the exclusive third-party provider of graphical advertisements through eBay's website. In addition, Yahoo! now will use PayPal as the exclusive third-party provider of its online wallet.

The most visible result of the partnership may be the combined Yahoo! and eBay toolbar. And through Yahoo! Messenger with Voice and Skype, users will be able to "click-to-call" retailers who advertise on the sites.