Yahoo!, eBay and PayPal connection

We had heard news about possible talks between search engine giants Yahoo! and ecommerce portal eBay. And now we have some confirmed news. The two companies have finally announced a partnership for advertising and online payments.

This deal would make Yahoo! the exclusive third-party provider of graphical advertising on eBay’s site. And eBay’s PayPal will become the exclusive payment system on Yahoo’s sites.

This is pretty huge deal for the two companies as they put aside their competitive differences over similar markets like VoIP and shopping. eBay owns Skype, which competes with Yahoo! Messenger with Voice service.

This might also see eBay relying on Yahoo! for their online advertisements, which they currently do with Google. The two companies also agreed to a co-branded version of eBay’s toolbar, which will have links to Yahoo! services.

In addition, they would also be developing “click-to-call” advertising technologies using which consumers can use a link included inside an advertisement to directly call that advertiser.

Terry Semel, Yahoo’s chairman and chief executive officer spoke to media about this announcement: “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.”

He added: “Yahoo holds a leadership position in all forms of online advertising. This partnership with eBay provides us with a great opportunity to further extend our sponsored search and graphical advertising reach to one of the largest and most active communities on the Web.”