The alliance started in 2006.

Yahoo will sell advertising on its auction site and also will use eBay’s Paypal service to handle payments.

The deal comes as investors are increasingly concerned that eBay’s highly profitable shopping service is being undercut as consumers increasingly use search engines to find Web sites selling products they are interested in. Moreover, there is a rise in free sites that match buyers and sellers, such as Craigslist, Google Base, and Yahoo’s own free auction service.

Now there are rumors about the problems between Yahoo and Ebay and apparently the alliance will day.