The U.K. based publications “The Times” and “Financial Times” have reported that eBay has been in talks with all three of the major search engines – Google, Yahoo! and MSN – about a closer relationship that could ultimately lead to an equity investment of one of the search engine companies in eBay.

At the core of the talks lies eBay’s untapped advertising potential. Currently, eBay does not display any paid search advertising on its website. But search advertising on eBay would be highly sought after – most visitors come to eBay with the clear intent of buying something, eBay’s pages a very sticky, and eBay collects a broad range of purchase history information that could be used to better target ads.

In addition, eBay is one of the most popular websites on the entire Internet, attracting over 70 million unique visitors during March 2006 in the United States alone and a boasting a growing user base of 75.4 million active users (that is users who bought, listed or bid for an item on eBay) for the twelve months to March 2006. Advertisers would sell their grandmothers for this kind of exposure!

Advertising exposure on www.ebay.com is only one of the issues being discussed; eBay is said to be keen to discuss options for more prominent display of eBay search results or ads within search engine results.

“The Times” goes a step further to report that eBay’s talks have concentrated on Yahoo! and MSN in order to break Google’s dominance and reduce its competitive threat to eBay. Over the past year, Google has moved to invade eBay’s turf with its launch of Google Base, its foray into classifieds sites, the launch of an online payment service comparable to eBay’s PayPal and the integration of Google Talk, which competes with Skype (owned by eBay), into the Gmail email service.

At this stage, eBay has declined to comment on the speculations.

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