In June, it was reported that the plan for Yahoo and Visa to build an online shopping site called Marketplace was apparently dead. In late July, that became reality -- but Yahoo and Visa simultaneously announced a new strategic alliance.
The two companies are now going to work together on the "Visa Shopping Guide by Yahoo," a co-branded Yahoo Visa card and other joint promotions. The Visa logo will be featured through Yahoo web sites, while Visa will expand its advertising on Yahoo sites and will endorse Yahoo as its preferred guide.
The Marketplace project was to be run by a joint Yahoo-Visa company, but now Yahoo has exchanged Visa 45% ownership in that company for 466,321 shares of Yahoo common stock, worth $21,245,000. Visa had invested only $300,000 in Yahoo Marketplace L.L.C., giving it an incredible 700% paper profit while plunging Yahoo's previously profitable second quarter deep into the red.
Yahoo, Visa recast their I-commerce collaboration
InfoWorld Electric, July 30, 1997
Yahoo buys back its shopping revenues
MSNBC, July 30, 1997
Yahoo, Visa end e-commerce pact
News.com, July 29, 1997
Yahoo-Visa deal on shaky ground
News.Com, June 20, 1997