May 25, 2006 2:19 PM PDT

Yahoo-eBay deal a Google buster?

(continued from previous page)

The companies plan to begin releasing the new products this year, starting with a several-month-long trial phase, and they hope to complete the launch next year.

Both Yahoo and eBay have seen increasing competition in their core markets, most notably from big hitters Microsoft and Google. Google's Base service, for instance, which launched last year, lets people post and search for information ranging from apartment listings to recipes.

Earlier this week, Wall Street analysts speculated that a tie-up between eBay and Yahoo would make sense, explaining that pooling their resources would give the companies more leverage in search, advertising and customer breadth.

Reports had surfaced earlier this year that eBay was in talks with both Microsoft and Yahoo to form a partnership to fight off Google.

Analysts said the partnership was a big win for eBay in particular.

"This deal should improve the position of an already very strong PayPal franchise," Citigroup analyst Mark Mahaney wrote in a research alert. "But what's potentially most needle-moving/thesis-changing here is eBay tapping into display advertising."

Scott Devitt, an analyst at Stifel Nicolaus, said the deal should boost both companies' bottom lines but this doesn't necessarily mean either one will start taking market share away from Google.

For Yahoo, Devitt noted, the deal brings a "massive ad client" in the form of eBay. And for PayPal, "the ability to cross-sell a payment platform on the largest traffic network on the Internet is significant to, and very beneficial to, the market value of the PayPal piece of eBay," he said.

"It's not so much about shifting query share as taking undermonetized components and filling holes with partners," he said. "Unless there's something over time which shifts query share, it's not that big of a strategic move (in relation) to Google."

Alexia S. Quadrani of Bear Stearns said the main concern that has weighed on Yahoo's stock has been the increased competitive marketplace online.

"We believe a partnership with the No. 5 destination site on the Web helps bolster Yahoo's competitive position," Quadrani wrote in a research note. "This deal may also weaken competitor MSN's position given speculation by newspapers such as The Wall Street Journal (4/21/06) that MSN might partner with eBay."

Safa Rashtchy of Piper Jaffray said the deal gives eBay the ability to monetize its huge amount of traffic and allows Yahoo to reach the 75 million or so users within the eBay network. "The partnership is a loss of potential partnership for Google and as such it is a negative, but we believe it is unlikely to undermine Google's position," he wrote in a research note.

Yahoo had a 69 percent active reach among Internet users in April, with 105.9 million unique visitors, and eBay's active reach was 39 percent, with 60 million unique visitors, according to Nielsen/NetRatings.

News of the deal pushed the stock prices for the companies up. Yahoo's stock rose 3.5 percent to close at $32.92 and eBay's rose 12 percent to $33.88.

Also at the shareholder meeting, Yahoo co-founder Jerry Yang declined a request by stockholder activist Amnesty International USA that the company ask the Chinese government to release Internet dissidents jailed in China. Yahoo has been accused of providing information on users that led to the arrest of several people in China.

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5 comments

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Great, Big Brother is getting Bigger & Bigger :(
Great, not :(
So now when people search for something on Yahoo beside being given biased information, that is biased to the 100s of businesses that Yahoo is in from on-line dating, to car sales, to travel, etc. etc., they will also be given further biased information, biased toward the 10's of Thousands of things that eBay is selling.
Talk about Big Brother taking control of what you see/buy through the Internet.
Of course when you consider that Google is doing the same, then makes one rather very depressed
as how few Giant US media conglomerates are taking over the world. To be exact setting up a great barrier to doing business online by more and more tilting the playing ground to the advantage of 100s of businesses that they are in, either by themselves or partners.

Is there no hope? This time there is hope, there is a search engine called AnooX which is Not-For-Profit and it's search results are better too due to being Democratically generated on an Open basis.
You can find them here:
www.anoox.com

So use Google & Yahoo if you want to make their share holders richer, or use & support AnooX,
if you want to make your/our share holders richer, because AnooX is Not-For-Profit.
Posted by kathy_torez (26 comments )
Reply Link Flag
Not For Profit Today
... For Profit the minute they become a big player. Just like Open Source, as soon as an Open Source package gains momentum all the "service providers" come out of the woodwork offering support, upgrades, etc. to the point where you could have bought a commercial package for the same price.

Everyone is in this for money. Period.
Posted by rstinnett (41 comments )
Link Flag
Great, Big Brother is getting Bigger & Bigger :(
Great, not :(
So now when people search for something on Yahoo beside being given biased information, that is biased to the 100s of businesses that Yahoo is in from on-line dating, to car sales, to travel, etc. etc., they will also be given further biased information, biased toward the 10's of Thousands of things that eBay is selling.
Talk about Big Brother taking control of what you see/buy through the Internet.
Of course when you consider that Google is doing the same, then makes one rather very depressed
as how few Giant US media conglomerates are taking over the world. To be exact setting up a great barrier to doing business online by more and more tilting the playing ground to the advantage of 100s of businesses that they are in, either by themselves or partners.

Is there no hope? This time there is hope, there is a search engine called AnooX which is Not-For-Profit and it's search results are better too due to being Democratically generated on an Open basis.
You can find them here:
www.anoox.com

So use Google & Yahoo if you want to make their share holders richer, or use & support AnooX,
if you want to make your/our share holders richer, because AnooX is Not-For-Profit.
Posted by kathy_torez (26 comments )
Reply Link Flag
Not For Profit Today
... For Profit the minute they become a big player. Just like Open Source, as soon as an Open Source package gains momentum all the "service providers" come out of the woodwork offering support, upgrades, etc. to the point where you could have bought a commercial package for the same price.

Everyone is in this for money. Period.
Posted by rstinnett (41 comments )
Link Flag
Well there is hope,.. just think about it.. most sites or almost all sites dont' want to help those that are starting out... and if they did we wouldn't be looking for a place to sell... i have found http://www.ldbidz.com they are new but i will have to try them out i like what i hear wbout them so why not... i just hope they stik to their plans...

So right now i will support http://www.ldbidz.com
Posted by NoOb21 (1 comment )
Reply Link Flag
 

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