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Yahoo!, eBay revive talks?
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March 24, 2000: 11:14 a.m. ET
Web portal and auctioneer reportedly resume merger discussions
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NEW YORK (CNNfn) - Yahoo! and eBay have returned to the negotiating table and are discussing a possible merger, according to a published report Friday.
The companies reportedly called off negotiations two weeks ago, but the Financial Times said Friday that investors' enthusiasm about a deal encouraged executives to restart talks.
Yahoo! founder Jerry Yang told CNNfn reporter Sasha Salama Friday morning that he would not comment about the reports until the company issues an announcement. (373K WAV) (373K AIFF)
but people close to Yahoo! and eBay confirmed that merger talks had resumed, according to the paper.
"They are also discussing a looser alliance, although those close to the companies warned it was far from certain that the talks would lead to a deal of any description," the FT said.
In pre-opening trading Friday, eBay rose to 227 on the Instinet electronic broker system, up from Thursday's close at 223-9/16. Yahoo! rose to 193 from 191.
A merger of the two Internet leaders would create a powerful combination of eyeballs and e-commerce. Yahoo! (YHOO: Research, Estimates) attracts millions of Web users to its community sites every month and eBay (EBAY: Research, Estimates) holds the title as the world's largest Internet auctioneer.
In its latest ratings of online auctioneers, e-commerce research firm Gomez Advisors ranks e-Bay as the no. 1 online auction site for the third quarter in a row, with Yahoo! trailing in third place. Gomez projects that in the consumer-to-consumer Web auction arena, this year's sales will climb to $4.5 billion.
Earlier talks between the two companies reportedly were preliminary in
nature and focused on a partnership rather than an outright merger.
While many analysts were enthusiastic about the possible combination, the deal faces several hurdles, including a possible high price tag, driven by eBay's pricey shares, and eBay's current multi-year partnership with America Online. (AOL: Research, Estimates).
The union of Yahoo! and eBay also could raise regulatory questions, the FT pointed out, since eBay leads the online auction space and Yahoo! is a top competitor in that sector.
Last week eBay entered the business-to-business auction area, launching eBay Business Exchange, a small-business item trading site. eBay broke out its 60,000 small business products listed among its 4 million items for the Business Exchange, because, according to a company spokesman, "It's a logical extension of the person-to-person trading platform that we've built." 
-- from staff and wire reports
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