eBay and Yahoo partner up

— 3:27 PM on May 25, 2006

eBay and Yahoo have announced a multi-year partnership that will allow the companies to link various services in an attempt to boost revenue. This partnership will put quite a portfolio of products under one roof; eBay now owns both PayPal and Skype, and Yahoo has acquired sites like Flickr, del.ico.us, and Kelkoo over the past couple of years. The Associated Press says that under the partnership, Yahoo will become the sole source of graphical ads for eBay, while PayPal will be the "preferred payment provider" for payments made via Yahoo's services. The companies will push Skype's voice-over-IP software to help advertisers get in touch with customers by phone.

The Associated Press claims eBay and Yahoo will begin testing combined services "later this year," but that the partnership isn't expected to bear fruit until next year. Indeed, an analyst for J.P. Morgan believes the alliance will result in a cool 30% increase in combined revenue for the two companies in 2007. Following the announcement, Yahoo and eBay's shares saw respective 2.6% and 7.1% jumps, while Google's dropped 1.9%.

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