Yahoo and eBay have formed a strategic partnership that, says the press release, "consists of four major components in the areas of search and graphical advertising, online payments, a co-branded toolbar, and the opportunity to explore "click-to-call" functionality."
Yahoo will improve its eBay searches and will standardise on PayPal for payments, both of which seem to be good for eBay. On the other side: "Yahoo! will become the exclusive third-party provider of all graphical advertisements throughout the eBay.com site, and sponsored search for complementary products on some eBay.com search results pages in the US."
This sounds as though Yahoo will sell banner ads that will appear on eBay pages, which is certainly good for Yahoo. However, I can't imagine many eBay users will be pleased to have the site slowed by banner ads, and eBay sellers might also have problems with the idea. If you are selling, say, CDs, will your auctions appear under a banner selling the same CDs at a Web-based store?
The "old" eBay community would no doubt have had a lot to say about these issues. However, I've looked on eBay's US discussion boards without finding a public outcry. Did I miss it, or does nobody care any more?
The partnership also falls short in that Yahoo's auctions site will continue to compete with eBay, and Yahoo doesn't charge listing fees. This is potentially scary for eBay since Yahoo is the world's biggest Web portal, in terms of unique visitors. If only Yahoo could exploit its traffic in Yahoo auctions, it could still be a serious threat.
Yahoo and eBay look like natural partners in the war against Google, but I can't understand why eBay has done a deal that doesn't make eBay Yahoo's preferred auction site, or ideally its only auction site outside Japan. Is that the next step?
* Guardian news story here.
