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AOL, eBay mum on reported deal

Neither company will confirm a report that AOL is planning to take a minority stake in the online auction firm.

eBay and America Online today declined to comment on a report that they are negotiating a closer business relationship, but the report spurred trading in both stocks.

A report that AOL might make a minority investment in auction site eBay appeared today in the Wall Street Journal. eBay, the leading online auction site and one of the most popular destinations on the Internet, already has a relationship with AOL

"We are always looking for ways to extend our relationships to better serve our community and further enhance the eBay experience. However, this report is purely speculative. It is our practice not to comment on such reports," eBay said in a statement released today.

AOL spokeswoman Wendy Goldberg said echoed that statement: "We don't comment on rumors and speculation."

eBay stock surged 6 percent in early trading, up 13.88 points to 245, but settled back later in the day to close at 233, up 1.875. Shares of AOL fell 6.625 to 152.875, a 4 percent decline.

An expanded deal with AOL might secure additional traffic for eBay, which collects a fee for listing items up for auction as well as a percentage of the sales price. eBay is being targeted by Yahoo Auctions, which doesn't collect fees from buyers or sellers but instead relies on ad revenues from auction pages.

AOL-eBay discussions remain fluid and a direct AOL investment in the person-to-person auction site is not a sure thing, the Journal reported.

eBay draws huge traffic--the site has about 2 million registered users--and the ability to hold users' interest for more than a few seconds. The average eBay user stays on the site for 27 minutes, according to a MediaMetrix survey, the paper reported.

eBay is one of the Web businesses that AOL Chief Executive Steve Case most admires, according to the paper.

The companies are talking about how to work closer together, including producing content, so AOL users visiting eBay wouldn't completely slip away from AOL's own pages. Some eBay executives are intrigued by the idea, which could be a revenue maker for the company, the paper said.

eBay also is interested in AOL's Digital City guides, which eBay could use to target local markets for items such as used cars or furniture.

Ticketmaster-CitySearch, which runs local Web sites that compete with Digital City, last month purchased CityAuction, which runs localized auctions.

News.com's Sandeep Junnarkar and Jim Hu contributed to this report. Reuters also contributed to this report.