Filed Under:
Tickers in this Article: EBAY, YHOO, GOOG, DELL, MSFT
Late last week, two of the web's powerhouses, eBay Inc (EBAY) and Yahoo! Inc (YHOO), came forward and announced the completion of a strategic partnership between the two companies.

The deal, which has the potential to clip high-flying Google's (GOOG) wings, covers a wide range of business activates including online payments, advertising and a Yahoo and eBay co-branded toolbar.

Also in the mix is the development of what the companies have referred to as a mutual "click-to-call" technology, which will facilitate voice communication for current voice-enabled users of Yahoo's Messenger and users of eBay's recently-acquired Skype internet phone service.

Material synergies from these efforts still have a long way to go before boosting the bottom lines of both firms, but the partnership will provide other, much more current benefits to both companies.

eBay will now retain Yahoo as the sole provider of advertising graphics for its web site. In return, Yahoo has made eBay's PayPal service the exclusive provider of its online payment system, which is used by the scores of advertisers continually buying ad space within Yahoo's web presence.

While this deal definitely strikes a blow towards Google's position as online advertising king, don't assume that the young prodigies working over at the Googleplex aren't putting up their own fight.

Also announced last week, Google and Dell Inc (DELL) have teamed up to become their own digital duo. The terms of this deal are more straightforward, but also offer stronger immediate benefits to both parties than the Yahoo/eBay arrangement.

With this deal, cash-flush Google has essentially paid their way into Dell's computers. Dell has agreed to ship their new desktops and laptops with Google's online search engine set as the default search tool. As well, Google's desktop-search application will also be pre-installed on new Dell computers.

Google gets an important boost to their search presence with this deal, while Dell boosts its top-line revenues as it will share in the sales generated from this software. This is an important first step for Google in cementing their search-leadership position and opens the door for further partnerships between the two technology heavyweights.

At the same time, the deal helps Google preemptively combat Microsoft's (MSFT) new operating system which is slated to come out soon and will include its own version of a desktop search application to rival Google's search efforts.


Of critical longer-term interest to investors at this point is the possibility that this initial Google-Dell deal could lead to a much more potent one-two combination. As speculation that Google will someday release their own operating system never seems to leave the technology community, the obvious opportunity exists to expand upon this initial partnership with Dell to make a yet-to-exist Google platform the default, or at least standard option, on Dell systems.

But for the time being, it will be interesting to see how the competitive landscape of the internet and technology sector will play out as these recent partnerships roll ahead to operate at full speed.

comments powered by Disqus

Trading Center