"Strategic Alliance" = "Scared as Shit"

Using the media to state you want to work with a competing network may sweeten the deal. Google recently invested with Skype on a WiFi start up and all the major engines want eBay:

Prompted by the chance to extend their advertising networks, the three search companies are understood to have approached Ebay separately in recent months with proposals for closer co-operation.

At the same time, Ebay has used the talks to discuss deeper partnerships that would extend the reach of its own services.That includes negotiating with the search companies over ways to design Ebay’s product listings so that they appear more prominently in the results returned by the search engines.Known as “search engine optimisation”, this practice has been controversial, since it raises the risk that the supposedly unbiased search engines will favour some results over others.

The question is... which, if any, of the engines will whore out their own results to gain the distribution? Or will they just give eBay ad credits?

I think it is funny how clueless the analysts are:

If Yahoo or Microsoft can at least match Google's search performance, then all bets are off, says Youssef Squali, a Jefferies & Co. analyst.

"EBay wants to have more than one source of lead generation, particularly when Google is moving into its own turf," he said. "If I'm (eBay Chief Executive) Meg Whitman, I'm pushing (Yahoo CEO) Terry Semel to get his new algorithm (new search service) out as soon as possible. And I'm doing the same thing with MSN."

Even if either engine matches in relevancy they will still have smaller advertiser bases, less efficient ad markets, and less of a search brand.

If eBay is buying profitable ads on Google how do they gain by buying less of them? How does it help them to consolidate their spend on a smaller search network - and thus likely overbid for less traffic to give themselves a worse ROI on their spend?

Nice observations.

I guess ebay feels it has to do something rather than just let Google have its way with them.

Isn't interesting to watch these star companies rise and expand till they can no longer grow and then start grasping at straw.

I've been doing ebay since nearly year dot. I used to make a lot of money on it, now it is hardly worth bothering with.
It is in decline, if not dead, for many sections. People are prepared to sell at a loss, or 50p on postage, which kills the viability for serious professionals.

Can you imagine if Google opens up a Store Function, forget auctions, partners it with Google payments, which people will trust, unlike Paypal.

The traffic they could drive towards them would be tremendous.

The biggest problem with any venture like this is getting started, chicken and the egg. People don't list because there are no buyers, buyers don't come because there is limited choice.

If Google do it big style then everybody would be fighting to join. Which one of us here who retails anything would not have a Google Store? Every 'mom & pop' outfit would also be there because it's G
It is quite frightening, just think of all the small retail websites they could also wipe out!

The Times reports on eBay holding talks with Yahoo and Microsoft over a possible partnership with the aim of thwarting Google's unrelenting advances.

From March 30, 2006 by Scot Wingo

The overlaps would be:

* Yahoo! Auctions and eBay (easy - nuke Yahoo!)
* Prostores and Y! stores (nuke prostores)
* Y! shopping and shopping.com (combine these take the best of both)

Financially: Y! ($46B) + e ($55B) = Y!bay (or ehoo!) = $101B vs Google ($115B)

So you'd have:

* yBay! Skype+IM vs. gtalk
* ymail vs. gmail
* yBay! search vs. google
* yBay! auctions/shopping vs. gbase/froogle
* yBay! paypal vs. google payment

Now you have a company that is about the same mass of Google and able to take it on in with some good wind in its sails on a product by product basis.

...inadvertantly leaked and embellished upon by the journalists (but embellished is not the exact, right word) for "reading attention" in the WSJ. Those dealings were not meant to be public.

SB