Yahoo, eBay in talks on alliance or merger-CNBC

(story to be published in tomorrow’s issue, March 16)

Yahoo Inc. and eBay Inc., two of the most popular consumer sites on the Internet, are in talks to consider a possible alliance or merger, the cable network CNBC reported on Tuesday, citing people close to the discussions. CNBC said the two companies were discussing various forms of a partnership, although no deal was imminent. A source close to the talks said there was a 50-50 chance of a “deep partnership” between eBay and Yahoo, with a”significantly ” smaller chance that Yahoo would buy eBay outright, CNBC said. CNBC said people with knowledge of the matter reported the talks intensified after the top Internet services company America Online Inc. announced it was buying media giant Time Warner Inc. in January. It also said that the talks could still fall apart at any time. Both companies declined to comment on the report. Shares of eBay shot up in after-hours trade, moving as high as 235, following a close at 211 in daily trade. The latest rise follows several days of strong gains for the online auction service. On Monday, eBay’s stock rose more than 16, sparking speculation that it could be an acquisition target, although many industry analysts saw more fundamental reasons behind the rise. eBay, which remains one of the few profitable consumer Internet sites, recently announced plans for a new auction service focused on cars, as well as more international sites, and it said it is deriving more business from the sale of high-ticket items. Yahoo’s stock was little changed after hours, trading around 170 on Island ECN, following its close at 168-3/4 on Nasdaq. Reuters