eBay Embraces IBM for Software, Marketing Boost

IBM (NYSE: IBM) will sell more computers and other products on eBay (Nasdaq: EBAY) as part of a broad software and marketing agreement announced by the two companies Thursday. eBay also said that it will use IBM’s WebSphere software to power the upgraded version of its online marketplace.

The deal is a big win for IBM, Giga Information Group vice president Mike Gilpin told the E-Commerce Times.

“eBay is well known as one of the really successful Internet companies,” Gilpin said. “In PR terms, it’s very desirable in these times of worldwide doubt about the value of e-business to just remind people that there really are some successful e-businesses out there.”

IBM said it will use eBay’s Web site as “a key sales channel for reaching targeted buyers.” The two companies, which did not disclose financial terms of the agreement, said they will work together on joint marketing programs both online and off.

External Validation

eBay’s choice of IBM over rival software makers is a validation of the company’s WebSphere technology, according to Gilpin.

“The type of thing that eBay does is technically a very challenging problem,” Gilpin said, so the choice shows that eBay thinks WebSphere is “up to the job.”

Gilpin said that in general, demand for software like IBM’s WebSphere, or WebLogic from BEA Systems (Nasdaq: BEAS), will grow as companies seek to replace old technology they developed themselves with faster, more efficient software.

Internal Mobilization

eBay said it chose IBM’s WebSphere, an increasingly employed e-business infrastructure software, to form the backbone of its technology upgrade “because of its open standards, as well as its strong reputation as a reliable platform for managing high-volume transactions.”

eBay Technologies president Maynard Webb said the upgrade ensures that eBay “will be able to grow reliably and cost-effectively.”

Second Inauguration

eBay also announced on Thursday the official debut of eBay Stores, which has been operating as a pilot project since June. eBay had said at the time that the pilot program would last two weeks.

More than 20,000 businesses and individual sellers are selling their wares through storefronts on the eBay site, both at fixed prices and through auctions, the company said.

Buyers at eBay can shop within individual stores, as well as browse for items across all categories. eBay said it will introduce more inventory-management and improved navigation tools in coming months.

IBM, which already has its own store on the auction site’s storefront section, said it will expand its sales of personal computers, servers and software on eBay, and will include a direct link to the site on the IBM.com homepage.

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