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Yahoo!, eBay eye alliance?
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March 14, 2000: 8:35 p.m. ET
Report: Web portal mulling 'partnership' with leading online auction company
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NEW YORK (CNNfn) - Shares of eBay Inc. rocketed in after-hours trading Tuesday after a report that Internet portal Yahoo! Inc. is in talks toward an alliance or merger with the online auctioneer.
The Wall Street Journal Interactive Edition, citing people close to the talks, reported there is a "50-50" chance that a partnership between the two online heavyweights will be struck within the next few weeks. According to the Journal, there is a smaller chance that Yahoo! will buy eBay outright.
In after-hours trading on the Instinet trading system, shares of eBay (EBAY: Research, Estimates) rose to 235, after closing the Nasdaq session Tuesday up 1-1/4 at 211.Yahoo! (YHOO: Research, Estimates) edged up to 169 in the late session, after closing down 7-1/6 to 168-3/4.
Spokespeople for eBay and Yahoo! declined to comment to CNNfn.com.
Such deals would mark Yahoo!'s latest big buyouts after a foray last year with purchases of Broadcast.com, an online video and audio aggregator, and Internet community operator GeoCities. Santa Clara, Calif.-based Yahoo! has been the subject of merger speculation after America Online Inc. agreed in January to buy CNNfn parent Time Warner Inc. for $182 billion.
One analyst said a Yahoo!-eBay tie-up would be smart, but that the prospective price tag has grown along with a recent rise in eBay shares.
"I have no idea if it's real or not, but in many ways it continues to make sense," said Lise Buyer of CS First Boston. "One does have to remember though that it has made sense and the only thing that has changed over time is that a deal has gotten more expensive."
"For eBay, Yahoo would represent a huge expansion of their base," added Buyer. "For Yahoo, whose revenue is almost entirely derived from advertising, it gets them a new stream."
After Tuesday's close, Yahoo!'s market value was roughly $89 billion, while eBay is currently valued at about $27 billion. 
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