Priceline to place travel services on eBay

Priceline.com will offer travel services on eBay under a deal the companies announced Friday.

The travel services e-tailer will list airline tickets, hotel rooms, car rentals, cruises, time-shares and vacation packages on the online auction site. People will be able to book flights and hotel rooms and make car reservations through the auction format or immediately, using eBay's "Buy It Now" feature.

Norwalk, Conn.-based Priceline will handle the service's technology, development, infrastructure and support. Financial terms of the deal were not released.

This is the second partnership eBay has signed this week. Thursday, the San Jose, Calif., company announced a three-year deal with Sotheby's to offer the auction house's products through eBay.

eBay also recently beefed up its eBay Motors division, adding a warranty and insurance program.

The company already has a travel section on its site, which lists vacation packages, luggage and airline tickets, for example. The travel section "holds tremendous promise" for eBay, Chief Executive Meg Whitman said in a statement.

"We are in the process of building out all of our high-potential businesses," she said.

Priceline has also been busy; the company announced a new phone card service Thursday.

Thomas Underwood, an analyst at Legg Mason, said the deal should benefit both sides. For Priceline, it helps the company reach a broader audience, something that company has begun doing with a recent marketing deal with America Online.

"In the deals that were being done a few years ago there were large up-front cash payments, and you hoped for return thereafter," he said. "These days they're looking to partner with strong distribution sites and share revenue, which makes a lot of sense--especially if deals lead to incremental customers."

For eBay, the Priceline partnership may not strictly follow its auction model, but it has the potential to bring in new customers, he said.

"If you want to sell a good in an efficient auction environment, eBay is best by far. Having other products around to attract the customers only helps the auction business," said Underwood.