Yahoo Rumored to Be in Talks to Buy eBay

The big news this week is not so much fact as rumor: Scot Wingo's blog post citing that a source told him that Yahoo is in talks to acquire eBay is causing rampant speculation in the industry.

Wingo, president and CEO of ChannelAdvisor, at his blog eBay Strategies, wrote yesterday: "The Wall St. buzz is that Microsoft and Yahoo are bidding for eBay. My source tells me that Yahoo has bid 1.76 shares for eBay ($40-41) and is expected to win at that price. Looks like yBay!, eHoo! Could happen in 08! I agree it may not make sense, but I've heard it from a pretty good source, so wanted to alert folks that at least it's out there making the rounds, no matter how unlikely."

We asked Skip McGrath, the veteran eBay PowerSeller, blogger and author, to weigh in. Here's what he said, "I predicted this in my newsletter about five months ago and still stand by it. If you think about it, it really makes sense. Both eBay and Yahoo need more depth and strength to counter Google. Yahoo failed at auctions in the US but Yahoo has the best auction platform in Japan where eBay has virtually nothing.

"eBay's Pro Stores and eBay express have never really gained any traction, but their user base could be merged with Yahoo shops. Yahoo is already using PayPal in Yahoo Stores — they might as well make some profits from that.

"I think the cultural aspect would be the most difficult but that would be eventually overcome (It took about 1.5 years for the PayPal/eBay cultures to merge). Overall I think it would be a win-win. eBay usually announces their fees by this time of January but they haven't yet. I wonder if that is due to a bigger announcement coming?"

Henry Blodget, of Silicon Alley Insider, says that such a bid is plausible, though other bloggers disagree. He also says there are rumors of Microsoft looking to buy eBay, and puts the talks into perspective in a post that outlines the pros and cons for shareholders should such mergers take place.

As for the speculation of Microsoft buying eBay, Blodget simply calls the scenario a "disaster."

At press time, neither eBay nor Yahoo returned calls asking for comment.

Yahoo Merchant Discounts
In other e-commerce news, Yahoo partners with American Express to offer small e-businesses savings and a new e-checks system debuts.

Open from American Express just announced the expansion of its Open Savings program with new partners Yahoo Search Marketing and Yahoo Small Business.

Through this partnership, business owners can use their Small Business Card to automatically reduce their costs of doing business with Yahoo Search Marketing and Yahoo Small Business services. Small business card members will receive a 5-percent discount on Yahoo Search Marketing's online advertising and promotion services in addition to Yahoo Small Business's services, including Web site hosting, e-commerce, business e-mail and domain name registration. To learn more about automatic discounts with these new partners, or about the Open Savings program, visit the Open Savings site.

eChecks Cut Fees
Apex Merchant Solutions, a sales office for credit-card processing banks, this week announced the availability of eChecks for its merchant clientele. eChecks let visitors at e-commerce sites pay for their purchases through business or personal checking accounts.

eChecks costs merchants 1.5-to-2.0 percent per transaction compared to 2.5-to-4.0 percent for credit-card processing, according to the company. In addition to saving as much as 50-percent per transaction, eChecks also provides access to an estimated 10 million online households without a credit card, providing an additional revenue flow for e-tailers, the company says.

Linda Thompson, President of Apex Merchant Solutions, said in a statement, "eChecks is an ideal solution to increase your customer base, provide a convenient alternative for your e-commerce visitors, and reduce your cost of accepting payments. It may be used for almost anything sold over the Internet and is rapidly growing in size and popularity."

Other features of eChecks include user authentication, age verification and a reduced liability window for charge backs, 60 days for checks compared to 180 days for credit cards.

Michelle Megna is managing editor of ECommerce-Guide.com.

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