There have been rumours about eBay talking with Yahoo and Microsoft about the possibility of working together to thwart growing competition from Google. But according to NYPost, these were not just rumours. Microsoft is actively bidding to buy eBay and integrate the online auction service with MSN portal. There's no word on the Buy It Now price yet but eBay is definitely in the marketplace.
I could think of two possible issues with the Microsoft-ebay deal:
» Microsoft has set aside more that $2 billion for building the MSN and Windows Live brand in 2007. Can they really afford to acquire eBay ?
» eBay runs on Sun Solaris SPARC servers. If MS acquires eBay, they may have to make a quick switch to Windows else it may send a wrong signal - Microsoft company running on Solaris ?
On a positive side, Microsoft will gain control over Paypal and Skype services which enjoy dominance in their respective segments.
Skype features may ultimately be clubbed with MSN Messenger. Also with Skype, Microsoft will also be able to set foot in countries where their IM software has low or negligible pentration.
As far as Paypal is concerned, Microsoft will have a chance to explore a completely new territory - online payments and directly compete with Google who is developing a similar service GBuy. Aslo, Paypal has a huge user base that could get attracted to Office Live and Windows Live Shopping services since they would have the same parent - MSFT.
NYPost sources said that talks with eBay were put on Microsoft's front-burner only recently, while the Yahoo! talks simmered. Bill Gates came to the conclusion that Yahoo! was more a content company than a tech company. This source said Gates has no interest in owning a content company.
If you can't beat someone, just acquire them - that's Microsoft mantra of success.