Strategic Alliance: Yahoo- eBay

The two giants have announced a multi-year strategic alliance for developing on the NA market. It was in the air for several days, but now it is official. The alliance covers four major domains: internet search and advertising, online payments (using PayPal), a tool box and click-to-call services. The deal makes sense as the two companies are not competitors, but have complementary portfolios and geographical areas, are starting to experiment increased competition (Google, ..) and a slight slowdown of the internet growth rate. Yahoo and eBay shares have respectively lost 20% and 30% since January. Yahoo has 400+m users, while eBay is the online auction leader with some 200m users and 73m PayPal subscribers. The deal is made at the expense of Google, which will have to answer to the move, in spite of its recent deal with AOL/Time Warner.