Many suggest that the broad alliance of the Yahoo and Ebay is structured as an attempt to bolster their competitive positions against Google Inc. “GOOG” and Microsoft Corp. “MSFT”.

According to a report by stock analysts at JP Morgan Chase released earlier in the week,

"A combined company would have the leading position in auctions, communications, payments, graphical advertising, audience reach and geographic breadth,"

The deal seems to bring the best of the two companies together in their US operations. According to Reuters,

“Yahoo, the world's largest Internet media company, will become the exclusive provider of graphical advertising on eBay, the biggest e-commerce player and provide some search services within eBay's site to connect buyers to items they seek.

In return, Yahoo will promote PayPal, EBay's popular online payment system, as a way for Yahoo's hundreds of thousands of affiliated Web sites and small business owners to conduct transactions online.”

Uncharacteristically, the market liked the idea of these big guys coming together. Shares of eBay shot up 9 percent and shares of Yahoo rose 3.8 percent. The overall market benefited from the announcement as well.

How does all this affect the small up and comers like Know More Media? It is hard to say. Usually this type of activity starts a calvalcade of partnerships, acquisitions, mergers and alliances. My guess is that not only Internet companies but all media companies will participate in some form of consolidation that results in deals that make sense and a bunch that make you scratch your head.

Meanwhile, we will keep adding great authors that offer world-class business content.