Yahoo partnered with eBay - a big concern for Google

Just one day after its prediction, two Internet village giants announced an alliance in the fight against rivals Google, Microsoft and AOL.

According to a multi-year contract announced last night, Yahoo and eBay will combine each other's strengths in the areas of payment, online advertising and communications to attract more users.

Immediately after this information, both companies' stock prices skyrocketed. Obviously, investors really expect new opportunities to make money that the contract between two of the most senior enterprises, the most successful in the Internet brings.

Specifically, Yahoo operates the world's most visited Web site with 402 million users and only gives in to Google in attracting online advertising. Last year, the company earned $ 5.3 billion in revenue and $ 1.9 billion in profits, mainly thanks to online advertising.

Meanwhile, eBay is the leader in e-commerce, with nearly 200 million customers who used to bid and 73 million other customers are using its PayPal online payment service. Last year, the company profited up to 1.1 billion USD on the total revenue of 4.6 billion USD.

According to Nielsen / NetRatings statistics, in April alone, nearly 113 million Americans accessed Yahoo or eBay or both.

The step is forecast

However, the announcement last night by Yahoo and eBay did not surprise anyone. For the past few weeks, Wall Street has blamed the possibility of a "Super merger" or an alliance of giants. At one point, it was thought that Microsoft wanted to buy Yahoo shares.

Although it has not been able to create a financial impact this year, the contract between Yahoo and eBay undoubtedly stirred up Internet territory, which was fiercely competitive.

But different from Google-AOL contracts, Yahoo and eBay are not pouring money for each other. Instead, the two sides "contribute rice to boil rice", use each other's resources and resources in the most optimal way to increase their revenue.

According to JP Morgan analyst Imran Khan, the alliance will help eBay increase revenue by $ 350 million next year, and Yahoo's 2007 revenue will add $ 150 million.

What is Yahoo and eBay?

Source: AP Under the agreement, Yahoo will become the exclusive video ad provider on the entire eBay website. Of course, it is not possible to miss ads in the form of search results. In addition, Yahoo's brand and search engine will be added to eBay's browser toolbar, which is being used by more than 4 million people.

And yet, thousands of small and medium businesses are sending their e-commerce home to eBay. Convincing local businesses to pour more money for online advertising is the number one priority of all major search engines. Therefore, having access to these businesses via eBay, it seems that Yahoo is one step ahead of its competitors. Perhaps they will choose a percentage deduction for eBay users?

Before Google was born, Yahoo! each dominate the search market. Now, with this contract, at least Yahoo can restore some of its market share.

In return, eBay's PayPal service will become the "number one priority" payment provider for all purchases on Yahoo. Remember, Yahoo is a popular destination for shopping, auction and countless subscription services.

In addition, eBay's Skype Internet phone service will be exploited to build a new marketing model, allowing advertisers to connect directly with users over the phone, instead of through the Website.

One point to note: This alliance will not expand to China, a rapidly growing market that has become a top priority for both Yahoo and eBay .

Finally, eBay can reduce the price of all transactions that need to be paid via PayPal on Yahoo, helping Yahoo to save a significant amount of money.

Let's shoot Google

Before the alliance with one another, Yahoo and eBay shared a common concern: Stopping Google's dizzying expansion.

In the last few months, Google has invaded eBay when offering free classifieds, along with a newly developed online payment service. Be aware that eBay has a very special relationship with Google. " They hate Google, they are afraid of Google, but they can't lack Google, " said Yankee Group analyst Matthew Del Percio.

Source: AP With revenues of US $ 2.25 billion in the first quarter and accounting for 43% of the Web search market share, Google is obviously the king of this market. Therefore, the most pessimistic, Google also only considered the contract between eBay and Yahoo is a slight wound.

While losing the exclusive ad position on eBay to Yahoo, the Google position is not so much shaken. In fact, while popular with text ads (with both AdWords and AdSense services), Google still lags far behind Yahoo! about graphic ads and images. That is now, it seems that Google doesn't have much to lose.

And yet, if successful with Google Base, an online "classifieds market" obviously wants to compete with eBay, Google has no reason to be afraid of the deal last night.

Microsoft - Slow buffalo drink turbid water

Microsoft is famous for being slow in these cases. This is the second time in 6 months the company missed an opportunity to enhance its presence in the Internet advertising market. Last year, Time Warner rejected Microsoft's offer to buy a share of AOL shares. More painful, Time Warner sold a 5% stake to Google for $ 1 billion shortly thereafter.

Now wishing to join hands with Yahoo !, or its eBay once again broke into smoke.

Along with Google's recent $ 1 billion investment in AOL, the Yahoo-eBay alliance is weighing up pressure on Microsoft, forcing it to rush to seek allies if it wants to win market share.

Analysts say that Amazon.com, the number one Internet retailer and MySpace.com, the most popular "out" teenage address, is the most logical candidate.

Thien Y