Yahoo and eBay announced that the companies would be forming an operational partnership, utilizing eBay’s online payment system and Yahoo’s advertising across sites.
The alliance is a competitive response to the in-roads that Google’s popular Web search system has made in both companies’ businesses, which is forcing every major Internet player to consider joining forces instead of trying to go it alone.
The deal — rumblings of which were widely known in Silicon Valley and on Wall Street — stops short of an outright merger. But it reflects the growing need for the biggest Internet companies to consolidate their various operations in the face of a mounting four-way competition and slowing growth rates.
For Wall Street analysts, the word of the day was “monetization,” which Internet industry insiders use as a shorthand for finding ways to make more money out of a property or asset, such as placing more ads on a Web page.
“It’s a very positive for move for both, since eBay gets to monetize its traffic with advertising,” Susquehanna analyst Marianne Wolk said. “For Yahoo, it significantly broadens their search” audience, she said.
Source: Reuters
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