Bloomberg News Service
SAN JOSE, California — EBay Inc. and Microsoft Corp. said they are forming an alliance that will let the biggest Internet auction company use the No. 1 software maker’s Web technology to try to gain users.
The agreement lets Microsoft software developers build tools for eBay’s auction sites, and integrate eBay into some of Microsoft’s MSN Web sites, including the BCentral site for small businesses, EBay spokesman Henry Gomez said. EBay also will upgrade software on its servers with Microsoft’s Windows 2000, he said.
EBay is trying to link its sites directly with those of some retailers and manufacturers as part of the auctioneer’s push to boost sales 50 percent a year through 2005.
Microsoft, which gets two-thirds of its sales from personal computer software, hopes eBay’s brand will help it attract more customers to its Internet products and services.
"We believe (the alliance) has more important implications for eBay than Microsoft" wrote Merrill Lynch & Co. analyst Henry Blodget in a report.
The multiyear agreement is forecast to start generating revenue for eBay later this year, the company said. The alliance won’t be "financially material" to Microsoft’s revenue, chief executive Steve Ballmer said. The companies didn’t say how many years the pact is for.
The agreement also calls for eBay to support Microsoft’s .Net program, which aims to develop standards for connecting PCs, the Internet and other devices such as cell phones and handheld computers.
"There’s a real opportunity at hand to integrate into MSN’s properties," said analyst Shawn Milne of Wit SoundView.
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