EBay plans to build trading system around WebSphere

Online auction Web site eBay Inc. last week said it has outgrown its homegrown transaction management applications and will replace them by next year with IBM Corp.'s WebSphere application server software.

As part of the deal, San Jose-based eBay plans to use WebSphere as the technical underpinning of a new trading system referred to internally as V3. EBay said WebSphere will manage the listings of items offered for sale on its Web site, as well as the bidding process.

The WebSphere technology should be more scalable, flexible and reliable than eBay's current proprietary software, said an eBay spokesman.

The deal includes an agreement for IBM to sell more of its products through the eBay site. Such agreements are becoming more common between technology vendors and e-commerce companies. For example, Compaq Computer Corp. made similar pledges as part of separate technology contracts that it signed with Sunnyvale, Calif.-based Yahoo Inc. early this year and with The Walt Disney Co.'s North Hollywood, Calif.-based Internet unit last fall.

Chuck Geiger, vice president of technology strategy at eBay, said during a conference call that the new trading system will be based on a three-tier architecture, with WebSphere-equipped computers sitting between the company's existing levels of servers.

EBay currently uses a mix of Windows-based servers from Compaq and Unix systems from Sun Microsystems Inc. Geiger said executives haven't decided which hardware will run the WebSphere software. But, he added, eBay will continue to rely on machines from both Compaq and Sun as part of the new trading system.

No price tag was disclosed for the project, which is due to start later this year and be completed by early next year.

The eBay spokesman said the company's own software "would have had to be reinvented" to keep pace with expected business growth.

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