Yahoo, eBay Partner in Multi-Year Deal

Confirming Wall Street speculation, Yahoo and eBay on Thursday announced a multi-year deal that will combine the two companies' efforts in search and graphical advertising, online payments, a co-branded toolbar, and possibly "click-to-call" functionality.

Joint services are expected to be rolled out later this year, including a testing phase. Full implementation is slated for next year.

"Yahoo! offers an engaged online audience, which drives massive traffic through its rich consumer content and premium services," eBay president and CEO Meg Whitman said in prepared remarks. "Working together, we can create more exposure for our properties, which in turn makes them more valuable to our users."

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In search and advertising, Yahoo would become the exclusive search and graphical advertising provider across eBay. On Yahoo's own search pages, eBay listings would be integrated in order to provide up-to-date listings of available products.

PayPal would also become Yahoo's exclusive payment provider, and receive prominent positioning. Yahoo premium services would be payable through PayPal, the companies said. Additionally, Yahoo will promote the payment system to its partners.

The two will also collaborate to produce a new version of the eBay Toolbar with integrated Yahoo functionality, and are investigating the feasibility of "click-to-call" functionality through Yahoo Messenger and Skype. The service could allow users to call an advertiser directly to complete a transaction.

"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," commented Terry Semel, Yahoo chairman and CEO.

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