eBay and Google announced on Monday a multi-year agreement involving text-based advertising and "click-to-call" advertising functionality. The move follows a similar deal between eBay and Yahoo announced in May (http://investor.ebay.com/ReleaseDetail.cfm?ReleaseID=198497&FYear=).

In today's announcement, the companies said Google will become the exclusive text-based advertising provider for eBay outside the United States. In addition, eBay and Google plan to integrate and launch "click-to-call" advertising functionality that leverage both Skype and Google Talk globally in each company's respective shopping and search platforms.

According to eBay's announcement with Yahoo in May, "Yahoo and eBay will explore developing and deploying "click-to-call" advertising technologies on their respective Websites in the U.S., accessible by users of both Yahoo Messenger with Voice and Skype."

eBay President and CEO Meg Whitman stated in Monday's press release, "We're pleased to expand our long-standing relationship with Google to explore new market opportunities, like click-to-call advertising, that benefit both our communities of users. People continue to evolve how they shop, communicate and advertise online. By combining the power of eBay in ecommerce and Skype in communications with Google's leadership in search and advertising, we can increase the usefulness of the Internet for shoppers, merchants and advertisers around the world."

According to the press release, the companies plan to begin testing the text-based advertising and click-to-call initiatives in early 2007 that will be evaluated over a period of several months. The specific components and timing of implementation will depend upon initial test results, and will vary by market, largely driven by local dynamics and joint capabilities. eBay and Google said the financial terms for certain components of the recent deal involve revenue sharing, but did not disclose specific details. Details of the agreement according to the press release include:

Search and Advertising on eBay Sites Outside the U.S.
Google will become the exclusive provider of text-based advertising on eBay outside the United States. This agreement provides Google advertisers access to one of the Internet's most robust online communities while enhancing the shopping experience for eBay buyers by making it easier for them to find the products they seek.

"Click-to-Call" Advertising and Technology Integration
Google and eBay also plan to integrate and launch "click-to-call" advertising functionality within eBay's U.S. and international marketplaces and Google's search platform. The click-to-call capability will allow a user to click on a link or icon within a product or service advertisement to initiate an Internet voice call to participating eBay merchants or Google advertisers directly from either company's respective sites, using Skype or Google Talk.

Starting in the near future, Skype will offer its users the option to download the Google Toolbar, to which Skype will add a custom button. The companies will also explore interoperability between Skype and Google Talk via open standards to enable text chat and online presence.

At this time, eBay does not expect this agreement will have a material impact on its financial results in 2006 or 2007.

http://investor.ebay.com/ReleaseDetail.cfm?ReleaseID=209064&FYear=