AN JOSE, Calif. - Online auctioneer eBay Inc. and top software maker Microsoft Corporation said Monday they have inked a strategic alliance to develop e-commerce applications and expand their Web presence.

The companies said they will work together to integrate San Jose-based eBay's online marketplace into a number of Seattle-based Microsoft's Web properties, including some of the company's worldwide MSN Network sites.

The integration of eBay's commerce services into Microsoft's Web sites is set to debut later this year, allowing consumers access to eBay's trading services via a number of Microsoft's Web properties.

EBay also said it will support Microsoft's technologies, and will be one of the first Web sites worldwide to offer its community-based commerce application to Web developers as an XML-based Web service. EBay will also deploy Microsoft software applications, including Windows 2000 Server and Passport.

The two companies also said they are collaborating on a variety of other projects around Web services integration. Shares of Microsoft closed at $56.69 on the Nasdaq on Friday, while eBay's shares closed at $34.