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Home » Hacking News » Ebay + IBM. Will it work?

Ebay + IBM. Will it work?

by Majik on September 6th, 2001 NEW YORK (Reuters) - International Business Machines Corp. (NYSE:IBM - news) plans to expand sales over eBay Inc.'s Web site, and the online retailer will run auctions on IBM's Web site, under a deal the two companies announced on Thursday.

In addition eBay(Nasdaq:EBAY - news), which auctions everything from concert tickets to car parts, said it selected IBM's application platform to upgrade the technology that runs its business.

The two companies said that IBM will extend its activity on eBay, following the success of an eight-month pilot project in which a limited amount of computers and servers were sold. Under the expanded program, eBay will auction and offer fixed price sales for IBM servers, computers and software such as electronic learning programs, IBM said.

Seventy percent of buyers on eBay are new buyers to IBM, which is important to us,'' said Lou D'Ambrosio, vice president, marketing and sales, IBM Software Group. He added that eBay will become a new channel to sell goods to consumers and small and medium-sized businesses.

eBay also will provide auction services on IBM's own Web site

The two companies will market their combined services and products together online and in full-page advertisements in national papers beginning on Friday.

With 34 million subscribers, eBay's site offers, at any given time, more than 6 million products and services for sale representing transaction activity of $256 a second.

San Jose, California-based eBay also said it would use IBM's WebSphere application server, as its platform for V3 technology upgrade.

The V3 is designed to allow eBay to get even bigger. eBay will begin rolling out the project in the fourth quarter and complete it in about 16 months. It will provide greater flexibility and allow eBay to easily add new features and businesses, and improve dependability, eBay said.

Application servers provide a base on which developers build new programs. They also connect back-end functions, such as transaction processing to the front end that the user sees.

The WebSphere deal marks a major win for IBM, which beat out competitors such as BEA Systems Inc. (Nasdaq:BEAS - news), Microsoft Corp. (Nasdaq:MSFT - news) and Sun Microsystems Inc.(Nasdaq:SUNW - news), IBM said.

The technology decision was wholly independent, a completely separate process from any marketing (agreement),'' said Chuck Geiger, eBay's vice president of technology strategy.

Although both companies declined to give financial information about the WebSphere deal, a person familiar with the agreement said it was a multimillion dollar win for IBM.''

The reason why it's so important is that eBay represents the success of companies born on the Web,'' said D'Ambrosio of IBM.

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