Yahoo and eBay, two companies that survived the bubble just to get outclassed by some Stanford pricks, cut a deal that embeds each deep inside the other's pants. EBay's PayPal system will handle Yahoo payments, and Yahoo will handle all third-party graphical ads on eBay.

Valley analysts act as if Yahoo and eBay are losing to some giant enemy, but everything sure looks healthy — look! Their trend lines on Google Search are just fantastic!

Yahoo and eBay Form Advertising Alliance [NYT]
Yahoo and eBay searches [Google Trends]