Yahoo considering eBay purchase. Neither company will comment on CNBC report
Matt Beer
03/15/2000
San Francisco Examiner
] FIRST Page B-1
(Copyright 2000)

Going once, going twice, gone to Yahoo?

CNBC, the cable/Internet financial network, quoted unnamed sources Tuesday as saying that Yahoo Inc., the Internet's most popular destination, is mulling over the purchase of eBay Inc., the wildly successful San Jose online auction site.

EBay spokesman Kevin Pursglove said it is a company policy not to comment on "speculations, gossip, rumors or the like." Similarly, a Yahoo spokesman said, "Yahoo doesn't comment on rumor and speculation, and this is clearly what this all is."

Nevertheless, Jerry Yang, Yahoo's co-founder, told The Examiner recently that "everyone wants to talk deals with us."

According to CNBC, ongoing delicate discussions between the two companies range from a "deep partnership" to an outright eBay buyout by Yahoo.

EBay shares closed at $211 Tuesday, up $1.25. Yahoo ended the trading day at $168.75, down $7.06. After-market trading had eBay at $235 and Yahoo at $170.

Such a merger would create a company with a combined market capitalization of some $116 billion

• massive, but still dwarfed by the $140 billion-plus market cap of Internet giant America Online.

The speculations are being fueled by the ongoing merger frenzy in the media and Internet worlds, including the giant Time Warner/AOL deal in January and this week's announced merger of the companies behind the Los Angeles Times and the Chicago Tribune.

Yahoo, according to CNBC, has been feeling pressures from these acquisitions, which could end up creating entities that would dilute its market lead.

Yahoo has also been in reportedtalks with Rupert Murdoch's News Corp., which has been actively seeking corporate alliances with Internet companies.

An eBay/Yahoo deal would make the online auction market a major sales channel, said Munjal Shah, president and CEO of Mountain View's Andale Inc., which publishes software to help sellers track their Internet auction sales.

"It would make the business world see this as a legitimate e-commerce venue," he said. However, a merger could close down Yahoo's own auction sites, which don't charge for listings.

Munjal also noted that the rumors come on the same day that the Woburn, Mass.-based FairMarket online auction site held its IPO. That stock, priced at $17 a share, closed at $48.50. The company creates and maintains Internet auction sites for businesses and has already signed up Microsoft, Dell and Excite, all Yahoo rivals.

"It's certainly very coincidental," said Munjal.