SAN FRANCISCO – Internet powerhouses Yahoo and eBay are joining forces in an alliance that further defines the battle lines in an online brawl with rivals Google, Microsoft, and AOL.

Under the multiyear partnership announced yesterday, Yahoo and eBay will draw upon each other’s strengths in online advertising, payments, and communications so they can connect with even more Web surfers than they already do.

Shares of both companies jumped on the news, reflecting investor expectations that the deal will open up even more moneymaking opportunities for two of the Internet’s oldest and most successful businesses.

Sunnyvale, Calif.-based Yahoo Incorporated operates the world’s most trafficked Web site with 402 million unique users and ranks second in the lucrative search advertising market behind Google. It earned $1.9 billion on revenue of $5.3 billion last year, primarily through online ads.

San Jose, Calif.-based eBay Incorporated is the e-commerce leader, with nearly 200 million users of online auctions and another 73 million American accountholders of its payment service, PayPal. It earned $1.1 billion on revenue of $4.6 billion last year, mostly by taking a slice of the auction sales on its site.

Nearly 113 million people in America visited Yahoo or eBay or both destinations in April, according to Nielsen/NetRatings Incorporated.

Yesterday’s announcement followed several weeks of rampant Wall Street speculation about the mating dance among the Internet’s heavyweights. At one point, there was even talk that Microsoft Corporation wanted to buy Yahoo.

Although it’s not expected to have a financial impact until next year, the deal between Yahoo and eBay seems likely to shake up the competitive landscape.

Coupled with Google Incorporated’s recent $1 billion investment in Time Warner Incorporated’s AOL, the YahooeBay partnership also figures to intensify the pressure on Microsoft to find an ally as it tries to become a more formidable player in Internet advertising.

Industry analysts yesterday identified the Internet’s top retailer, Amazon.com Incorporated, and an increasingly popular teen hangout owned by News Corporation, MySpace.com, as the most logical candidates for a Microsoft alliance.

Unlike the Google-AOL deal, Yahoo and eBay aren’t swapping any money. Instead, they are pooling together their resources in an effort to boost their revenue beginning next year – a prospect that provided a lift to their recently slumping stocks.

EBay shares surged $3.68, or 12%, to close at $33.88 on the Nasdaq Stock Market, where Yahoo’s shares rose $1.13, or 3.6%, to finish at $32.92.

“This is a great deal for eBay in particular,” a Standard & Poor analyst, Scott Kessler, said.

In a Thursday research report, a J.P. Morgan analyst, Imran Khan, predicted the deal will increase eBay’s revenue by $350 million next year and boost Yahoo’s 2007 revenue by $150 million.

Neither Yahoo nor eBay projected how their alliance might affect their respective financial outlooks.

Under their partnership, Yahoo will become the exclusive provider of display advertising throughout eBay’s Web site and will add some search-generated ads.

Although eBay has done relatively little advertising so far, its site has the potential to become a major marketing magnet with 60 million unique American visitors last month, according to comScore Media Metrix.

In another new twist, Yahoo’s brand and search engine will be blended into an eBay Web browser toolbar that has been downloaded by 4 million users so far.

Ebay’s PayPal service will become the preferred payment provider for purchases made on Yahoo’s site, which provides a wide array of shopping, auctions and subscription services.

And eBay’s Skype Internet telephone service will be used to explore building another marketing vehicle that would allow advertisers to connect with prospective customers on the phone instead of through their Web sites.

“We are very excited because it allows us to provide the best of class in so many services,” Yahoo’s chief financial officer, Susan Decker, said during an interview yesterday.

The relationship, however, won’t extend to China, a rapidly growing market that has become a top priority for Yahoo and eBay, as well as its major rivals.

Even before teaming up, Yahoo and eBay shared a common interest – thwarting Google’s rapid expansion.

In recent months, Google has invaded eBay’s turf by offering a free classified listing service as well as a payment service. Despite those moves, Google has said it has no plans to trample eBay, one of the largest advertisers on its network.