eBay explores 'super union' to thwart Google

The prospect of a "super-union" between two or more of the Internet's most powerful companies was raised on Friday as news emerged that eBay has held talks with Yahoo! and Microsoft over a possible partnership designed to thwart the advance of arch-rival Google. A spokesman for eBay refused to rule out the possibility of a deal, telling Times Online that the company is in regular contact with Yahoo!, Microsoft and Google. "The reality is we work closely with all these companies. We're always talking to them," he said. According to the Wall Street Journal, eBay's parallel sets of discussions with Yahoo! and Microsoft began in earnest late last year and were spurred by Google entering into eBay's market with the launch of an online classified advertising site. The four companies already compete and co-operate on a number of fronts. But there is a growing feeling within the industry that Google is becoming more aggressive. Julie Meyer, chief executive of Ariadne Capital, the technology venture capital firm, said: "Google is undertaking the biggest landgrab the world has ever seen. We are seeing it exercise its market power, its cash and its brand. "It probably would take a coalition of major players, a kind of super-union, to stop it and I would not be surprised at all to learn of a whole host of discussions behind the scenes." Industry observers have noted that Google, which has a cash pile of $10 billion, has recently begun to act as a venture capital firm, investing in a string of online projects and placing bets in a number of areas. The company's entry into online voice communications last year with the launch of GoogleTalk threw down the gauntlet to Skype, the market leader in internet telephony that was bought by eBay for up to $4.1 billion (£2.2bn). Google has also been hugely supportive of open source software developers, such as the non-profit Mozilla foundation, which compete aggressively with Microsoft, the world's largest software house. Yahoo!, Microsoft and Google are all jockeying for position in online search, an area where Google holds a clear lead. Google has also begun a concerted drive to recruit the brightest IT engineering teams across the globe. Overnight the company announced that its quarterly sales had soared past $2 billion for the first time. Meanwhile, sites such as eBay's online auction house, the world's largest, rely on Google to drive consumers to them, a relationship that benefits Google's partners but which could leave them vulnerable to changes in policy from the search-market leader. Rivals will also be mindful that Google, despite being set up seven years ago, has only been operating as a public company - with the huge escalation cash resources that has involved - for less than two years. For more on this story see The Times Online. UKFast is not responsible for the content of external Internet sites.

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