Silicon Valley has been rife with speculation about potential mergers among the handful of companies that dominate the internet.
Behind all the talk is the rise of Google, which has used the cash thrown off by its fast-growing search advertising network to finance a push into other online activities ranging from the Froogle comparison shopping site to a new online video store.
Two suspicions have driven the talk of mergers. One is that Microsoft, struggling to catch up with Google in search while also reinventing its struggling MSN online service, would use its vast financial resources to jump ahead, perhaps through an acquisition of Yahoo.
The other suspicion on Wall Street has been that Google’s rise will eventually threaten the existing internet powers, forcing them into defensive mergers.
This time around, however, John Donahoe, head of Ebay’s marketplace business, said his company and Yahoo had not discussed any deeper links than the partnership announced on Thursday.
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