The Google, eBay Competition Question Revisited

from the holding-pattern dept

About a year ago, some were pointing out that, while Google and eBay weren’t in the same business directly, they were increasingly competing. After all, part of the reason eBay is so powerful as a marketplace is that sellers know to go there because buyers always look there. However, if buyers went straight to Google to search across the entire internet, it could take away some of eBay’s market power. Still, since Google actually ends up driving plenty of that search traffic to eBay, it’s often hard to separate out the competitive impact versus the beneficial one. The latest study shows Google closing the gap in holiday shopping traffic with eBay, but also notes that many of those searchers were simply pushed to eBay. Still, it raises plenty of questions about whether or not this relationship will always be so beneficial. There was talk that a big part of the reason eBay bought was due’s position as a very high bidder on the same AdWords that eBay was bidding on — and the deal would help take them out and maybe lower eBay’s costs on Google. If it did, so far, it hasn’t seemed to impact Google’s bottom line that much — but it does demonstrate just how fluid the situation between the two companies may be. Google Base may be nowhere near competing with eBay just yet, and rumors of a Paypal-wannabe haven’t gotten anywhere yet — but the dynamic between the two companies should remain fun to watch for quite some time.

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