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Microsoft, eBay Ink E-Commerce Pact

Microsoft and eBay Monday united to jointly expand their global online presence while streamlining the online buying process.

Financial terms of the deal were not disclosed. Product development and joint integration, however, are key factors of the new partnership.

The alliance, in addition to serving the online buying community, provides significant opportunities for Web developers, noted Kevin Pursglove, senior director of communications at eBay.

"This partnership is designed so that it benefits eBay members, the Microsoft community and opens the doors for two extensive communities: the Microsoft developer and those developers who design for a third-party applications," he said.

Here's how the relationship works: During the coming year, eBay will support Microsoft's new Internet initiative, the .NET platform, and will be among the first sites to offer Microsoft's community-based search engines to Web developers as an XML Web service.

Meanwhile, Microsoft will integrate eBay's marketplace into a number of its Web properties, making the online auction site accessible to 33 new international marketplaces, while EBay deploys the Windows 2000 Server across all of its front-end servers. Further, eBay will offer its users the ability to register and sign in on the auction site via Microsoft Passport.

The deal is a win-win situation for both companies, assessed Dave Nadig, founder of MetaMarkets.com, a provider of investment information.

"By becoming the anchor client of the .Net paradigm, eBay makes itself easy for other sites to plug in to. For example, a site that sells musical instruments can pick up musical instruments for auction," he told on24.com. "Microsoft becomes the first customer on the other side of the deal, and takes the trading community and incorporates it into its own Web site. This works in such areas as putting eBay cars for auction onto its Carpoint.com Web site."

Additionally, eBay's trading service will be integrated into Microsoft's bCentral small-business service, which will enable small-sized businesses to directly post items for sale on eBay from within the Microsoft-hosted Commerce Manager service.

The partnership will allow integration across a number of Web sites, while expanding eBay's online services, according to Meg Whitman, CEO of the online auction provider. "By working with Microsoft's cutting-edge technology we will significant strengthen eBay's marketplace and our community's ability to trade seamlessly at any time for anywhere on the planet," she said.

The collaboration combines eBay's Application Program Interface (API) and Microsoft .Net's commerce engine, which can be licensed by third-party Web sites through the API. The search engine, as a result of the new partnership, will now be offered as a SOAP -based XML Web service.

The Microsoft .NET platform additionally will extend the eBay API to make eBay's search engine accessible to millions of developers worldwide.

Both companies are also working on a strategy in which eBay will capitalize on the Microsoft Windows XP operating system, according to a statement released by eBay.

Jared Blank, an analyst with Jupiter Research, said today's announcement may be just a first step for eBay. "It is curious that eBay is partnering with Microsoft, which is known for personal computer applications, as opposed to an SAP, which pulls information across a large enterprise," he said.

"Although this is a win-win situation for both companies, going with an SAP would allow eBay to access larger companies and pull its auctions together. While today's announcement provides the Microsoft network with one more piece of functionality, it may be just the beginning stage of eBay's expansion."

Blank also noted that