A way to counter the growing power of Google

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(Continued) The RFS Newsletter, Sep. 2, 2006. Page 2
Such a partnership was seen as a way to counter the growing power of Google. The Mountain View company is the leader in selling text advertisements on the Internet. In this business, it dwarfs Yahoo, especially in Europe. So as eBay looks to build its international advertising revenue, Google was in a position to offer a better deal than Yahoo.

“Google is very strong in every country outside of the United States,” said Meg Whitman, eBay’s chief executive, in an interview Sunday night. “We felt this arrangement of assets made sense.” But the alliance is a striking one from a competitive standpoint. Investors have worried that eBay’s growth could slow because buyers can increasingly use search engines like Google to find obscure products. And Google has been moving into each of eBay’s main businesses: Google Base lists products for sale; Google Checkout competes in some ways with eBay’s PayPal; and Google Talk is an alternative to eBay’s Skype online phone service.

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