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Yahoo, eBay call off talks?
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March 15, 2000: 8:26 a.m. ET
Discussions on merger or alliance broke down last week, paper reports
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NEW YORK (CNNfn) - Talks between Web portal Yahoo! Inc. and online auctioneer eBay Inc. have ended, according to a published report.
Speculation first surfaced late Tuesday that the two online firms, which dominate their respective industries, reportedly were discussing either a merger or alliance that would dramatically expand their customer bases. However, those talks ended last week, according to an article in Wednesday's Financial Times.
Word that the discussions had broken down instantly deflated Yahoo! shares, which had risen in after-hours trading Tuesday after the Wall Street Journal's interactive edition reported the two sides were talking.
Shares of Yahoo! fell 12 euros to 175 in European trading Wednesday. Yahoo! (YHOO: Research, Estimates) had closed down 7-1/16 to 168-3/4 in U.S. trading Tuesday before inching forward to 169 in after-hours trading. Meanwhile, eBay (EBAY: Research, Estimates) jumped to 235 in after-hours trading Tuesday, after closing the day up 1-1/4 at 211 during regular trading hours.
Both papers reported talks between the two companies were preliminary in nature and focused more on forming a partnership rather than an outright merger.
But while analysts liked the possible combination, the deal faced several hurdles, including a possible high price tag, driven by eBay's pricey shares, and eBay's current multi-year partnership with AOL.
Neither company would comment on the report.
The discussions reportedly began shortly after America Online (AOL: Research, Estimates) signed a merger agreement with Time Warner Inc. (TWX: Research, Estimates), the parent company of CNNfn.com. Since then, Yahoo! has been rumored to be in merger discussions with several firms, including Rupert Murdoch's News Corp. (NWS: Research, Estimates). 
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