New Tech Alliances Signal More Scrambling Ahead

NEW TECH ALLIANCES SIGNAL MORE SCRAMBLING AHEAD
[SOURCE: Wall Street Journal, AUTHOR: Kevin J. Delaney kevin.delaney@wsj.com, Mylene Mangalindan, Robert A. Guth]
Yahoo and eBay unveiled a broad partnership under which eBay will display ads brokered by Yahoo on its U.S. online auction site and marketplace. Yahoo will promote eBay's PayPal electronic-payment system as a way for consumers to pay for Yahoo services. Separately, Google and Dell confirmed an agreement to install Google software on Dell PCs before they are shipped to users. The deal, which Dell says could include as many as 20 million computers a year, will get Google's search services and ads in front of more users. The agreements are the result of behind-the-scenes efforts by tech companies big and small to form alliances that strengthen their efforts to own a bigger piece of the Web landscape. At stake are huge future profits from Internet users and advertisers, whose buying and spending habits are still in flux. EBay's decision to tie up with Yahoo appeared to be a tacit acknowledgement that it didn't feel comfortable more closely aligning itself with long-time partner Google, which has begun efforts over the past year that some believe compete with eBay in areas such as payment services and listings. Meanwhile, Google's Dell pact was driven partly by Google's desire to keep a leg up on Microsoft, say people familiar with the matter. The deals come amid growing ambitions of the Internet companies that increasingly have them encroaching on one another's turf. Rivalries are building as Internet penetration in the U.S. has reached a mature, slower-growth phase. That augurs more battles over attracting and retaining current Internet users, who are increasing the time they spend online. At the same time, relationships among many Internet companies exist already, complicating rivalries and prospective alliances. More scuffles for new alliances appear to already be underway. Google and Microsoft, for example, are competing to provide search technology and related advertising to News Corp.'s Fox Interactive Media division, which includes the popular MySpace social networking site, according to people familiar with the matter. A Fox Interactive spokeswoman declined to comment. EBay itself could be a further object of heated courting by rivals. The Yahoo-eBay ad agreement is exclusive to the U.S., leaving open the possibility of eBay doing an ad deal with Google or Microsoft in Europe and Asia.
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* Yahoo and EBay Join to Fight The Giants
http://www.washingtonpost.com/wp-dyn/content/article/2006/05/25/AR200605...