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Yahoo! and eBay further planned to
collaborate on a click-to-call functionality, which would
allow users navigating the web to contact advertisers
directly through the phone instead of their websites. To
make the click-to call functionality operational, eBay’s
Skype 5 or Yahoo’s Messenger service would likely
be used. The partnership between Yahoo! and eBay was
expected to be completely implemented by 2007.
eBay sought to increase its advertising revenues through
this alliance as Yahoo! had experience in search
advertising. Catherine England, spokesperson for eBay, said,
“We [currently] manage ads in-house and through a few
affiliates. It was a variety of sources and its’ just not an
area that we focused on. Through this partnership with
Yahoo, we'll be able to leverage their expertise in that
area.” 6 |
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Analysts opined that Yahoo! and eBay had joined forces to consolidate their
respective positions in the Internet industry. Rick Aristotle Munarriz,
senior analyst at Motley Fool, said, “This is a great move for both of them.
These are two companies that were great and their performance on the market
in the past few years has been a little disappointing so it’s their way of
saying ‘Hey, we can matter again.” 7
The deal also highlighted the intense competitive environment in the
Internet industry. Experts opined that the alliance would help Yahoo!
counter the market threat from Google Inc. (Google). Google had emerged as
the biggest competitor to Yahoo!, especially in the growing search based
advertising market. Google was the most popular search engine and held a
43.1% share in the online search market in the US when compared to Yahoo!’s
market share of 28% in April 2006. Google was also rumored to be making
effort to build its own merchant service that could rival eBay.
More >>
[5] Skype is a proprietary peer-to-peer Internet telephony (VoIP) network,
which allow users to contact advertisers directly without picking up a
telephone or searching or a phone number.
[6] Natali T. Del Conte, “Yahoo, eBay Strike Multi-Year Ad, Transactions
Deal,” www.pcmag.com, May 25, 2006.
[7] Natali T. Del Conte, “Yahoo, eBay Strike Multi-Year Ad, Transactions
Deal,” www.pcmag.com, May 25, 2006.
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