A row may be brewing between the two biggest names on the Internet — Microsoft and America Online — over the development of a local version of glamour Internet auction site eBay in this part of the world.
As reported in the May issue of monthly business magazine Unlimited, PBL Online, the Internet arm of Kerry Packer's Publishing and Broadcasting Limited media empire, announced in February that it had entered a joint venture with eBay.
Since then, PBL Online has changed its name to ecorp, a name which which according to a statement is "consistent with the company's strategic focus on e-commerce and its strategy of developing Australia’s leading portal," the joint Internet content venture with Microsoft, NineMSN.
In February PBL said that in eBay's first foray outside the US, the two companies would develop a localised version of eBay for Australia and New Zealand. Such a project would help PBL's print subsidiary ACP to leverage its stable of "trader" titles on the Net. It appeared logical that the venture would be undertaken by NineMSN.
Trouble is, almost immediately after the PBL deal, eBay announced it would also be expanding its relationship with America Online (AOL) — the giant online services company that, since its purchase of Netscape Communications, is regarded as Microsoft's most serious rival on the Internet. Under the deal, eBay and AOL will create a series of co-branded auction pages on AOL.com, CompuServe, Netcenter and Digital City Web sites. The co-branded sites will have eBay's look and feel but AOL will keep all revenue from display advertising.
The Wall Street Journal recently reported that AOL was negotiating to obtain a stake in eBay, as it has done with other commerce partners. Even if it does not, it will look to take advantage of the relationship right across its business, including AOL Australia, which is unlikely to countenance handing the business to Microsoft.
A spokesman for the then PBL Online told Unlimited that the NineMSN-AOL issue "is not something we want to comment on at this stage — except to say that our joint venture with AOL is a separate venture from our joint venture with Microsoft".
Brett Chenoweth, business development manager of NineMSN — which believes it has the mandate to pursue the Internet content strategies of both parties — said "the general arrangement will be that we'll distribute eBay in Australia and probably New Zealand through the NineMSN portal sites. We don't have an auction strategy at the moment, so it fits in there as well. We need a solution here and given that PBL is entering into that relationship, it makes a bit of sense that we follow the same solution."
AOL may have different ideas.