Google-eBay Alliance 'Modest Negative' For Yahoo!
Google announced on Monday that it will sell advertising on eBay's auction sites and create a system to help buyers directly call sellers.
Under the deal, Google will provide exclusive text advertising on eBay outside the U.S. Full terms of the agreement were not disclosed.
"The primary benefit to Google is the addition of a major international network partner" Tim Boyd, an analyst at Caris & Company, said in a research report. "This could be especially helpful to Google in Asia, where it faces much stiffer competition than in Europe from local search players like Baidu.com."
"We view the deal as a modest negative for Yahoo," Lehman Brothers analyst Doug Anmuth said in a research report. "While we acknowledge that Yahoo is more competitive with eBay outside the U.S., particularly in Asia through its stakes in Yahoo! Japan, Alibaba and Gmarket, we believe the Street was optimistic that Yahoo and eBay could ultimately extend their agreement to other regions."
"Our sense is that eBay will garner greater financial benefits," Caris & Company's Boyd said. "We base this assumption on two observations: First, the fact that Google's network partners typically earn an 80% revenue share. Second, the fact that Skype is currently the clear No. 1 voice-over-Internet-protocol 'click-to-call' solution in terms of users and user growth rate."
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