Yahoo, eBay Drop E-biz Bombshell

[jmiller]

EBay and Yahoo dropped an announcement bomb early this morning saying that the two Internet giants have agreed to combine their efforts on a number of projects. By 2007, expect an increase in eBay search results on Yahoo!, an increase of contextual text and graphical ads on eBay, PayPal to power Yahoo! Wallet, a co-branded eBay Toolbar, and click-to-call advertising using Yahoo! Messenger with Voice and Skype.

Hang on. I think I've got some announcement shrapnel in my leg.

The partnership, which only affects U.S. clients, is thought to be an affront toward Yahoo!'s chief rival in Google, who until recently wasn't considered a threat to eBay. With the arrival of Google Base and a rumored online payment system in the works, eBay has now responded with precision force through its Yahoo! alliance.

The deal will also have a large impact on Yahoo!'s bottom line as the exclusive implementation of PayPal as its third-party payment provider will likely lower the search company's costs in payment processing.

More important to the advertiser and online sellers is the robust mesh of options now available to them through pay-per-call, the increased seller presence though auction listings in organic Yahoo! search results, and delivery of contextual ads on eBay listings.

" This will include testing some sponsored search ads for complementary products and services," said Bill Cobb, president of eBay North America. "For example, a buyer searching for a hair dryer might be presented with sponsored search ads for related items like shampoo or hair brushes. To be clear, we will not place ads on view item pages."

Admitting that eBay's advertising infrastructure "is not as robust as it could be," Cobb said the online auctioneer would be working with Yahoo! to improve its keyword ad program. Part of this involves Yahoo! accepting more keyword purchases from eBay.com to boost eBay's inclusion in sponsored search results.

"These efforts will mean that Yahoo!’s millions of users will have more access to eBay listings, and eBay.com sellers should benefit from increased traffic to the site," said Cobb.

This summer the duo will be testing ad placements at the bottom of empty search results pages that return no matches for queried items. If, for example, a buyer is looking for a particular vintage G.I. Joe action figure, but no listings for the doll are found, ads will appear related to the query instead.

The inclusion of Skype with Yahoo! Messenger creates another targeted opportunity for advertisers as the combination will be a catalyst for pay-per-call advertising where links included in ads allow the searcher to call a merchant directly. All changes will be gradually implemented for the rest of 2006, to be fully realized in 2007.

"Our consumers will benefit from the combination of Yahoo! and eBay's leading technology and services, providing them with one of the best online experiences," said Yahoo! Chief Executive Officer Terry Semel.

News of the massive collaboration effort sent early morning trading into an upswing for the two companies. At 10:30 this morning, Yahoo! shares were up nearly three percent while eBay jumped seven percent. At the same time, Google dropped by 1.27 percent.

[davidmg]

This shouldn't affect Google in The least. They are smart enough to have not looked at this before planning Goolge Base. When you are at the top eveyone tries lining up with or against you.





www.davidmg.com

[crankydave]

Wonder how "kind" the Google filters are going to be to Ebay NOW. (insert smilie of your choice)

Dave

[sweet_home_arizona]

This news is going to land with a huge thud.

eBay has been driving both buyers and sellers away in droves at just the right time...like recently banning teacher materials just as the home school selling season is taking off. eBay is very adept at reducing a steadily smaller buying audience...*sigh*.

They don't understand that ticking people off unnecessarily is NEVER a good idea.

And as far as Yahoo - they couldn't get their auction site off the ground, but yet they are teaming up with eBay? That's like tying an anvil to your leg and jumping in the ocean.

Most of us who have sold on eBay in the past are kissing eBay EBYE and actively searching for other venues!! I am personally salivating at the thought of Google competing againt "we're only a venue" eBay.

Hey, but the good news is that if you need grow lights, porn, bootlegs, "supplements", and gun parts...you're still in luck on eBay!!

PSST! A little advice: Don't bother re-arranging the deck chairs on the Titanic.

[incrediblehelp]

Originally Posted by crankydave

Wonder how "kind" the Google filters are going to be to Ebay NOW. (insert smilie of your choice)

Dave

I would be more than happy to see those miserable rankings from ebay removed. So many or irrelevant and worthless to the end searcher.

Google trys to curb this news with their own even though I have heard wispers of this Dell/Google partnership for months now.

[ggreenwood4]

I've never had much use for e-bay, used it once to buy and got ripped off, used it again to sell and it only cost me money! And others I know that do and have used e-bay think that the prices to use it are way too high and now use cheaper sites and do well! And if you use e-bay to buy, well buyer "Beware"!
One already gets too many useless search results from yahoo & google, espeacialy the sponsored ads, most seem loaded with spyware....so I won't be taking advantage of it... or should I say IT won't be taking advantage of ME!

[rocky1]

Sounds like another of a thousand attempts to install the Yahoo! toolbar on everyone's computer if you ask... Sign up for E-Bay and install the Yahoobar!!

Personally I'm getting kinda tired of Yahoo trying to install itself on my machine with everything I download! I think their toolbar should be declared malware, and every Anti program known to man should quarantine it!! It's tried to install on a half dozen program updates I've downloaded, it did install on a flash update I downloaded, it's a pain in the a.ss to get rid of, and it's exhibited some extremely odd behavior on at least one computer, taking over my Googlebar link! Everytime I turned the Yahoobar! off, my Googlebar disappeared!

Go away Yahoo! if I want to visit your site or your search engine, I know where to find you!

[crankydave]

Originally Posted by incrediblehelp

I would be more than happy to see those miserable rankings from ebay removed. So many or irrelevant and worthless to the end searcher.

Google trys to curb this news with their own even though I have heard wispers of this Dell/Google partnership for months now.

And even more interesting, IMO, will be the Ebay adwords spots. There's hardly a term Ebay doesn't pay for.

Dave

[garyb108]

First of all I think it sucks that Yahoo even allows Ebay pay-per-click listings. I have been a customer of theirs for 5 years (since it was Overture) and now I have to bid against E-bay? All it does is drive the cost of bidding out the roof! Plus the fact that products being sold on Ebay undercut prices so bad it is impossible to compete! I think Yahoo is blind in this aspect. They are going to cut their own throats in the long run. They are already losing lots of pay per click customers due to the out of control bids! Some companies are paying as much as 1 to 3 dollars a hit! It's INSANE. Google and Yahoo may have monopolies on pay per click advertising, but it will bite them in the you-know-what in the end. Businesses cannot afford to keep paying more for pay per click advertising than it costs to run a TV commercial! That's my 2 cents.
Signed, A disgruntled advertiser.

[ctabuk]

I like the item on Dell and Google, for years I have been saying is that if Goog does have a weak spot it is in the PC/Broadband sphere - ie in the UK British Telecom partners Yahoo, Tiscalli MSN and so on, people have to choose Goog as a home page. Dell are very good PC's - cheap and reliable.

[weslinda]

Okay, first, I have to address Ebay bashers. I've bought and sold on Ebay for quite a while and done quite nicely. If you are careful, you will never be screwed over, and you won't lose money on a transaction.

Second, Ebay isn't going down like the Titanic. Q1 for Ebay they were up 35% in revenue growth. They also saw a 31% increase in registered users YOY. This is going to be a $5 billion dollar company merging powers with Yahoo. It's an announcement that should at least be taken somewhat seriously.

Finally, while I hate the "Ebay" ads just like everyone else, they work. Ebay is making some serious money, and very few of us have built a company that could show the sustained YOY growth that they have.

While I don't think this will kill Google's revenue, I do think this could be a decent dent. Definately worth noting the shift.

In all honesty, I think we are in the very infancy of the internet and related businesses and it will be quite a while before the markets really start to settle. We're still learning how to do things right, and new technologies are changing the shape of things on a daily basis.

Don't forget, Yahoo has one of the largest registered user bases on the internet, as does Ebay. I think that people should respect this a little more than they are.