eBay Strikes Sales, Marketing Alliance with IBM

As Hewlett-Packard executives defend their decision to purchase fellow PC maker Compaq, the firms’ chief rival in the business consulting and computers space — none other than IBM Corp. — is busy establishing a new sales and marketing channel, by way of a partnership with online auction site eBay.

Through the agreement, Armonk, N.Y.-based IBM will use eBay to move a whole host of its offerings, ranging from software to PCs and servers — the latter products being the ones that the Compaq-HP merger is aimed at capturing.

Since the beginning of the year, Big Blue has maintained a limited sales program on eBay, and recently set up an eBay Store of its own. Now, the companies — which say that trial effort is “thriving” — plan to expand IBM promotions throughout the site, by featuring more products available for auction or at fixed prices.

As part of the agreement, the two companies said they plan to launch marketing and advertising efforts to promote their collaboration, using online, television, print and direct media. Additionally, a link to eBay will appear on the IBM.com homepage.

Ultimately, IBM said it envisions eBay — which has more than 34 million registered users, and last year saw more than $5 billion in transactions — as a key sales channel for reaching buyers online.

“eBay is a strong branding platform for almost any company,” said Lou D’Ambrosio, who is vice president of marketing and sales of the IBM Software Group. “By increasing our presence on the site, we’ll increase traffic to IBM’s eBay store as well as to IBM.com. We are excited about the marketing synergy between eBay and IBM, and believe our partnership will provide exciting opportunities for our customers, channels and our brands.”

Financial terms of the deal weren’t disclosed. But in return for its services, San Jose, Calif.-based eBay will begin using IBM WebSphere open-platform e-business software — which the online auctioneer says will be used in its current effort to upgrade its trading infrastructure. (eBay said its new software version is intended to make it easier for its developers to add new features and user tools.)

Such a high-profile agreement is considered a big win for IBM, which competes with upstarts like BEA Systems, as well as stalwarts like Sun Microsystems and Microsoft in the server space.

eBay will also benefit from IBM’s future advertising and marketing of its products and online sales channels.

“eBay and IBM will help each other achieve even greater success,” said eBay president and chief executive Meg Whitman. “IBM’s leadership in infrastructure technologies, combined with its global marketing muscle, will play a central role in furthering our growth. At the same time, our marketplace will provide a vibrant channel for IBM to reach new customers.”

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