Yahoo! and eBay Form Strategic Partnership to Further Expand Their Businesses in U.S.

"Our consumers will benefit from the combination of Yahoo! andeBay's leading technology and services, providing them with one of thebest online experiences," said Terry Semel, chairman and chiefexecutive officer, Yahoo! Inc. "Yahoo! holds a leadership position inall forms of online advertising. This partnership with eBay providesus with a great opportunity to further extend our sponsored search andgraphical advertising reach to one of the largest and most activecommunities on the Web."

"We are thrilled to be working more closely with Yahoo! and wethink this agreement represents a great opportunity to benefit ourcommunities and grow our businesses," said Meg Whitman, president andchief executive officer, eBay Inc. "Yahoo! offers an engaged onlineaudience, which drives massive traffic through its rich consumercontent and premium services. Working together, we can create moreexposure for our properties, which in turn makes them more valuable toour users."

Yahoo! and eBay will begin to roll out the initiatives outlined inthe agreement this year. This will include a testing phase that willtake place over the next several months, with a plan to achieve fullimplementation in 2007.

Further details of the agreement include:

Search and Advertising:

Yahoo! will become the exclusive third-party provider of allgraphical advertisements throughout the eBay.com site, and sponsoredsearch for complementary products on some eBay.com search resultspages in the U.S. Yahoo! already provides a broad and deep array ofessential services to an extremely engaged audience around the world.Through this partnership, Yahoo! can expand upon these strengths withthe addition of eBay.com's high quality online inventory, offeringadvertising clients an optimal marketing experience.

Yahoo! and eBay have also agreed to collaborate on ways toincrease the quality and comprehensiveness of Yahoo! Web searchresults for eBay.com and to provide Yahoo! search users with moreup-to-date listings from the millions of products on the eBay.commarketplace, with the goal to create a better search experience byenabling shoppers to more easily find relevant eBay listings.

Integrated Commerce Payment System:

Yahoo! has selected PayPal to become the exclusive third-partyprovider of its online wallet -- allowing customers to pay for Yahoo!services from bank accounts, credit cards or balances associated withtheir PayPal accounts. PayPal, which has 73 million accounts in theU.S., also will be deeply integrated on the Yahoo! site and willreceive prominent positioning when users purchase Yahoo! servicesacross its network. This offering will provide Yahoo! consumers withadditional online payment choices and the option to use PayPal acrossthe entire Yahoo! network.

PayPal will be integrated and promoted as Yahoo!'s paymentsolution to Yahoo!'s merchants and publishers, which includes theYahoo! Publisher Network, Yahoo! Search Marketing, Yahoo! MerchantSolutions and other small business services.

Co-Branded eBay Toolbar:

Yahoo! Web search functionality and Yahoo! site links, includingthe Yahoo! Home Page, Yahoo! Mail and My Yahoo!, will be integratedinto a co-branded version of the eBay toolbar. The eBay toolbar hasbeen downloaded by more than four million eBay users to date, and letsconsumers quickly link to preferred eBay locations while offeringenhanced online protection. This new co-branded toolbar will make iteven easier for consumers to take advantage of both companies'offerings to quickly access information wherever they are on the Web.

"Click-to-Call" Advertising Functionality:

Yahoo! and eBay will explore developing and deploying"click-to-call" advertising technologies on their respective Websitesin the U.S., accessible by users of both Yahoo! Messenger with Voiceand Skype. "Click-to-call" is a product feature link included insidean advertisement that consumers can use to directly call thatadvertiser to pursue a transaction.

Yahoo! and eBay do not expect this relationship to have a materialimpact on their financial results in 2006. Both companies willincorporate any financial impact for 2007 and beyond when they delivertheir business outlook for those periods.

About Yahoo! Inc.

Yahoo! Inc. is a leading global Internet brand and one of the mosttrafficked Internet destinations worldwide. Yahoo! seeks to provideonline products and services essential to users' lives, and offers afull range of tools and marketing solutions for businesses to connectwith Internet users around the world. Yahoo! is headquartered inSunnyvale, California.

About eBay Inc.

Founded in 1995, eBay pioneers communities built on commerce,sustained by trust, and inspired by opportunity. eBay enablesecommerce on a local, national and international basis with an arrayof Websites -- including the eBay Marketplaces, PayPal, Skype, Kijiji,Rent.com and Shopping.com -- that bring together millions of buyersand sellers every day.

Forward-looking Statements

This announcement contains forward-looking statements regardingYahoo! and eBay (including without limitation as described in thequotations from management in this announcement) and their strategicand operational plans related to, and the expected financial impactof, the announced strategic partnership. Those statements involverisks and uncertainties, and actual results could differ materiallyfrom those discussed. Factors that could cause or contribute to suchdifferences include, but are not limited to, the reaction of users ofeach company's services to the strategic partnership, the reaction ofeach company's competitors to the strategic partnership, the decisionby either party to reduce the scope of this agreement upon theoccurrence of certain events set forth in the agreement, and thepossibility that the expected benefits of the strategic partnershipmay not materialize to the extent expected or at all. All informationset forth in this release is as of May 25, 2006, and neither companyintends or undertakes any duty to update this information to reflectfuture events or circumstances. More information about potentialfactors that could impact each company's business and financialresults is included under the captions, "Risk Factors" and"Management's Discussion and Analysis of Financial Condition andResults of Operations," in each company's respective Annual Report onForm 10-K for the fiscal year ended December 31, 2005 and QuarterlyReport on Form 10-Q for the quarter ended March 31, 2006, which are onfile with the U.S. Securities and Exchange Commission (the "SEC") andavailable at the SEC's website at www.sec.gov.