Report: eBay Eyes Opening Storefronts

Internet powerhouse eBay (Nasdaq: EBAY) is gearing up to move beyond its auction listings base with an e-commerce hosting service, according to a report published Monday in an industry journal.

The new venture, which would be rolled out within several months, reportedly would allow businesses to set up branded fixed-priced storefronts on eBay's Web site.

With a storefront hosting service, eBay would be able to extend its reach to other e-commerce segments by keeping buyers and sellers from leaving its system while allowing vendors to offer their goods to customers outside the auction format.

Quoting an executive with knowledge of the auction giant's plans, the Interactive Week report said that eBay president and chief executive officer Meg Whitman has made the storefront project a "top priority" and is working aggressively to implement the service.

A spokesperson for the San Jose, California-based company, however, maintained that eBay is only evaluating whether to undertake a storefront offering and said there is no set timetable for a launch.

Competition Heats Up

According to the report, the primary impetus behind eBay's storefront push is to even the playing field with e-tail heavyweight Amazon.com and portal giant Yahoo!, both of which have augmented their offerings by integrating auctions and hosting online stores for small and large businesses on their services.

Among Internet auction service companies, Auctionwatch and Andale have also recently begun tapping the storefront space.

Although pricing for eBay's service has not been set, the company is said to be examining models that include charging merchants a fixed fee for each transaction, a percentage of merchants' gross merchandise sales or a flat-rate monthly fee.

Extending Reach

The storefront service is the latest indication that eBay is seeking to build upon its brand and make its technology a pervasive online force. Last month, eBay announced that it had formed a strategic alliance with Microsoft (Nasdaq: MSFT) to jointly develop e-commerce applications and expand both companies' Web presence.

A central component of the deal calls for Microsoft to integrate eBay's online auction services into several of Microsoft's Internet properties, including the MSN network, the Carpoint online automotive site and WebTV. The companies also plan to integrate eBay's auction services into Microsoft's bCentral small business Web site, which would allow small businesses to market their goods and services to eBay customers.

Businesses that use bCentral will be able to post items for sale on eBay directly from bCentral and view eBay transaction histories from within bCentral.

Moreover, the companies said that the use of the Microsoft .NET platform will extend the eBay application program interface and make eBay's commerce engine accessible to developers around the world.