Microsoft, eBay Seal E-Commerce Alliance

Microsoft (Nasdaq: MSFT) and eBay (Nasdaq: EBAY) announced Monday that they have formed a strategic alliance to jointly develop e-commerce applications and expand the companies’ Web presence.

The alliance, which calls for broad cooperation between the two companies, will initially focus on three key initiatives: the integration of eBay’s marketplace into selected Microsoft Web sites, eBay’s deployment of Microsoft’s Passport technology, and the use of Microsoft’s .NET technology by eBay.

Financial terms of the deal were not disclosed.

Integrating eBay

A central component of the deal calls for Microsoft to integrate eBay’s online auction services into several of Microsoft’s Internet properties, including the MSN network, the Carpoint online automotive site and WebTV.

The integration will be customized for each Microsoft site. For example, the companies plan to mesh eBay Motors with Carpoint. As a result, Carpoint visitors will gain access to eBay Motors’ used car listings.

The companies also plan to integrate eBay’s auction services into Microsoft bCentral small business Web site, which would allow small businesses to market their goods and services to eBay customers.

Businesses that use bCentral will be able to post items for sale on eBay directly from bCentral and view eBay transaction histories from within bCentral.

Paying with ‘Passport’

eBay also plans to offer its customers Microsoft’s Passport, which allows users to digitally store billing information in an online wallet and use the wallet to pay for purchases at multiple e-commerce sites.

Integration of Microsoft and eBay services is slated for later this year. Microsoft and eBay said that the services would be available in a number of the 33 international markets currently served by MSN.

Into the .NET

Under the deal, eBay will now offer its application program interface (API) as a SOAP-based XML Web service.

The companies said that the use of the Microsoft .NET platform would extend the eBay API and make eBay’s commerce engine accessible to developers around the world. Additionally, the companies said that .NET will help eBay offer its services to consumers through a variety of devices and applications.

eBay also plans to deploy the Microsoft Windows 2000 Server across all its front-end Web servers.

The two companies also said they are collaborating on additional projects involving Web services integration.