Microsoft and eBay have announced a strategic alliance.
Microsoft and eBay this week announced a strategic alliance. eBay’s online auction forum will be integrated into select Microsoft web sites including MSN, Carpoint (an online automobile site), WebTV and Microsoft bCentral (a small business site). In addition, users will be able to register and sign on to eBay using a Microsoft Passport account.
eBay currently makes its application program interface (API) available to web developers of third party sites around the world. As part of the alliance, eBay’s API will now be a SOAP-based XML service using Microsoft’s .NET platform. So web developers who use eBay’s auctioning technology on third-party websites will soon end up using Microsoft’s technology. Because it is a SOAP-based XML service, .NET is compatible with other web-based applications, including Java. In addition to .NET and Passport, eBay will also migrate its own servers onto Microsoft’s Windows 2000 Server.
The integration will give eBay even greater ubiquity around the world. Customers will now be able to access the global eBay community through Microsoft’s localized international sites, while an estimated 100 million users worldwide have Microsoft Passport accounts, representing a considerable added customer base. Making its online auction technology available on Microsoft’s sites will also bring eBay several new revenue streams.
Yet Microsoft stands to gain most. It clearly understands the importance of controlling key platform technologies, and is aiming to become the leader in web-based component services through .NET. By allying with a likely dotcom survivor, Microsoft may well be able to establish its own platform as the standard for web services technology. In addition, eBay’s practice of licensing its auction technology to third-party websites greatly increases the potential audience for the .NET platform.
More such alliances are likely in future. At the moment, Microsoft’s web server market share is just 41%, compared with 92% for desktop operating systems – so the firm is likely to use all the means available to build market share in the web services platform towards its OS dominance.
