Yahoo! Inc. and eBay Inc. plan to partner and share each other's online advertising, payments and communications divisions.

The multiyear partnership raises the competition against rivals Google Inc., Microsoft Corp. and America Online, Inc.

eBay's PayPal service will become the preferred payment provider for purchases made on Yahoo's site, which is the most trafficked website with 402 million unique users. eBay has nearly 200 million users and another 73 million U.S. accountholders of PayPal.

eBay also owns internet telephone service provider Skype, a company that Yahoo might use to enter the "click-to-call" advertising internet telephone market.

The two companies will start testing their partnered services later this year.

"We are very excited because it allows us to provide the best of class in so many services," Susan Decker, Yahoo's chief financial officer told Reuters.