Yahoo, eBay Announce Multiyear Partnership

Yahoo Inc. and eBay Inc. on Thursday announced plans for a multi-year partnership aimed at better serving users, merchants, and advertising communities in the U.S.

The agreement means Yahoo become eBay's exclusive third-party provider of all graphical advertisements for eBay.com, and sponsor search for products on some of the company's search results pages in the U.S.

Yahoo and eBay will begin to roll out the services this year. The two companies will soon enter a beta phase that will last for several months, with plans to fully implement the project in 2007.

PayPal, which is owned by eBay, and has 73 million accounts in the U.S., will become Yahoo's payment service and online payment system. This allows customers to pay for Yahoo services from bank accounts, credit cards or balances associated with their PayPal accounts.

The service also will integrate into the Yahoo site to offer merchants and publishers a payment system. This includes Yahoo Publisher Network, Yahoo Search Marketing, Yahoo Merchant Solutions and other small business services.

Both companies will co-brand a version of the eBay toolbar allowing consumers to link to eBay locations, such as Yahoo Home Page, Yahoo Mail and My Yahoo eBay said an earlier version of the toolbar has been downloaded by more than four million eBay users to date, and lets consumers quickly link to preferred eBay locations while offering online protection.

The companies also plan to explore developing and deploying "click-to-call" advertising technologies on Web sites. The product links are included inside an advertisement allowing consumers to directly contact the advertiser to pursue a transaction, the service assessable by Yahoo Messenger with Voice and Skype.

Yahoo and eBay said they do not expect the relationship to have a "material impact" on 2006 financial results. Both companies will incorporate any financial impact for 2007 and beyond when they deliver their business outlook for those periods.