Digital Journal — Microsoft has been in talks for several weeks about a possible acquisition of eBay according to a recent article by the New York Post. Unnamed sources close to the Post said the tech giant is considering buying online auction leader eBay and merging it with MSN in an effort to challenge Google for Internet supremacy.
While talks are still active, the Post says they have “cooled somewhat” as a result of antitrust concerns. And despite last week’s announcement that eBay and Yahoo formed an advertising and search alliance, sources say it won’t quell Microsoft from courting eBay.
This isn’t the first time Microsoft has sought to buy out the competition — last year it came very close to a deal with Time Warner that could have joined MSN with America Online. The deal could have even seen AOL and MSN merge in a 50-50 joint venture. But, Microsoft lost out on that deal to Google.
The AOL-MSN merger would have been important to Microsoft because it would have transformed AOL’s search technology to be based on MSN’s rather than Google’s. MSN has seen its search technology increasingly lagging behind competition from Yahoo and Google.
Microsoft lost that deal to Google who signed the agreement with AOL to form an online advertising partnership. Google also invested $1 billion for five per cent of America Online.
Once Microsoft realized the AOL boat had left port, the company turned its sights onto Yahoo and eBay for potential partnerships that would give it clout in Google’s Internet. But, as the Post reports, Microsoft chair Bill Gates concluded that Yahoo was a “content company”, not a tech company and Gates has no interest in owning it.
Now, if the Microsoft-eBay deal goes through, it could be very lucrative for MSN as eBay sees $1,608 dollars exchanging hands every second on its website.
But, the deal also seems like a desperate move from the Redmond-based giant as the company has been faced with mounting criticism for delays over its next operating system, Windows Vista.
EBay, who owns online voice-over-IP company Skype, could also be a welcomed addition to the Microsoft family as the company needs new avenues in which to compete online.
