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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Nelson Chang who wrote (5793)	2/26/1999
From: Ed Forrest	Respond to of 41369

Not sure if this has been posted before.If so,sorry. Ed Forrest Why eBay And AOL Make Good Partners February 19, 1999 by: Hank Hudepohl The Journal reports that AOL may buy into eBay. Kudos to Brian Swette, eBay's Senior Vice President of Marketing, for locking up 3 long years of featured placement on AOL. The ad cost eBay $12 million last September, but appears to be worth it. The existing relationship between AOL and eBay favors eBay, and AOL wants a change. Here's why: Community. eBay's stickiness holds the attention of the web community, including AOL's. Commerce. If AOL had cut a transaction-based deal for just 5% of eBay's net revenues, AOL's 3 year profit could be worth $10 million or more. A 15% commission could yield over $30 million. Clout. After 3 years under the current agreement, what will AOL hold? The $12 million ad fee plus interest. What could eBay have? A community of 12 million shoppers that can be "sorted by category" and easily worth $1000 (or more) each. AOL would rather pursue a cheaper person-to-person auction alternative (maybe OneWebPlace, Haggle.com, or a home-grown solution) and then add value to it, but because of Swett's savvy, AOL is in a bind. The big question for AOL is whether a deal with eBay is too much too late. eBay's future looks bright but recent outages and clunky navigation portend that rapid growth may also be eBay's biggest problem. Right now it's a tar pit. But a closer partnership/mentorship with AOL (no stranger to growing pains) may be just what eBay needs. Even if an AOL-eBay deals pulls through, AOL would still lack an integrated business-to-person auction partner. Stay tuned for more: Gomez believes that other portals won't be far behind with auction deals.