by Mike Masnick

eBay's Warning Shot To Google: We Can Take Our Ad Money Elsewhere

from the warning-signs dept

Over the last few years, there have been a number of questions about whether eBay and Google were on a collision path. The two appear to be in separate businesses, but there is definitely some overlap. At the same time, however, the two were partners. eBay has consistently been one of the biggest advertisers on Google. In fact, there were rumors that key reason that eBay bought was because's AdWords bids kept pushing eBay's AdWords bids higher. By taking out, eBay would then be able to spend a lot less money on Google ads.

As the competition has become more direct, however, things may get particularly interesting. A year ago, Google announced its Google Checkout offering, which was somewhat competitive with eBay's PayPal (at least for merchants). This was worrisome enough that eBay banned Google checkout from its site. This past Monday, Google announced a somewhat childish plan to hold a protest meeting outside eBay's own conference. Apparently, eBay has responded in a big way: by removing all their US ads from Google. Publicly, eBay insists it's just an experiment with ad dollar allocation -- but many believe it's a direct response to Google's "protest." Considering how much money eBay puts into Google's bank account, this isn't a small deal. This is a warning shot from eBay to Google that becoming too directly competitive could mean that one of Google's top ad buyers will move somewhere else. If it's true and if eBay can really resist advertising through Google, this could have a huge impact on Google -- not just in the loss of so many ads, but also in driving down the cost auction price on ads where eBay has been an active bidder. This is a case where eBay may actually be in the power seat against Google and could cause Google a lot of pain. Update: As noted in the comments, Google has backed down and cancelled the protest. Looks like eBay has a bit of pull...

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    TheDock22, Jun 13th, 2007 @ 2:45pm

    Google's Response

    I think Google should just develop its own, and 100% better, auction site and declare war on Ebay.

    If Google can do one this right it is making existing products much better.

    reply to this | link to this | view in thread ]

  2. identicon
    Mathias, Jun 13th, 2007 @ 3:06pm

    Re: Google's Response


    competition good, I'm sure the software patent lawyers are starting to salivate...

    reply to this | link to this | view in thread ]

  3. identicon
    Johnson Rice, Jun 13th, 2007 @ 3:11pm

    I hope the two separate and get involved in some REAL competition. We'll see that market open up, and ebay/paypal will have to start actually trying PLEASE their customers. If you've ever read some of the HORROR stories on sites like RipOffReport and other consumer reports sites, Ebay and PayPal have some very interesting "security" precautions they use to essentially steal hundreds of dollars from people and hold it for months while they collect the interest.

    reply to this | link to this | view in thread ]

  4. identicon
    Mongoose, Jun 13th, 2007 @ 3:17pm

    Google should just buy Ebay and get it over with.

    reply to this | link to this | view in thread ]

  5. identicon
    commodore crush, Jun 13th, 2007 @ 3:36pm

    I pray that Google makes a competitive beeline toward their own auction site. I'm a seller on ebay and can't believe how high the cost of doing business goes up every time they decide to raise fees. Lately, my end of the month cost just to list stuff makes me barely break even.

    You get charged to list an item
    You get charged a percentage of what the item sells for
    You get charged by using paypal

    And you can't even talk to a human at ebay. You know why? Because they would be so overwhelmed by complaints. I wish I could take my business elsewhere but ebay is like Rich Uncle Pennybags from Monopoly and I'm sitting on Baltic Ave.

    And what other site would ebay advertise on? AOL? Hahahaha! Okay, so my grandma would see the ads.

    reply to this | link to this | view in thread ]

  6. identicon
    Towhead, Jun 13th, 2007 @ 3:38pm

    Apparently, eBay never got around to taking down the ads for their sister company, PayPal. I chuckled because as soon as I was done reading the story, I saw a google ad for "PayPal - Official Site".

    reply to this | link to this | view in thread ]

  7. identicon
    Buzz, Jun 13th, 2007 @ 3:39pm

    Google FTW

    I think Google is in a position to create a directly competing auction site. Heck, I'd use it.

    reply to this | link to this | view in thread ]

  8. identicon
    adam, Jun 13th, 2007 @ 3:41pm

    did you see the update from google on their checkout blog? Looks like they are backing off... hmmm, maybe they really do enjoy ebay's ad revenue after all. ;-)

    reply to this | link to this | view in thread ]

  9. identicon
    Tony B., Jun 13th, 2007 @ 4:53pm

    gBay... I'd shop there! ;)

    reply to this | link to this | view in thread ]

  10. identicon
    Monique E, Jun 13th, 2007 @ 5:11pm

    Competition is required in this market. ebay has been able to quash any little guy attempts in the past. It's time for Google to step up and offer a competitive shopping mall/auction house.

    reply to this | link to this | view in thread ]

  11. identicon
    Brian, Jun 13th, 2007 @ 6:03pm

    Conflict of Interest?

    Since eBay's buy out of Paypal service has declined while prices have risen. I've always thought it introduced a huge conflict of interest. They are essentially judge, jury, and executioner on ALL matters. It seems like they were more responsive when the payment service was seperate. Double dipping, scams, fraud, esoteric rules, and unappealable decisions. Why is eBay still everyone's auction site of choice? Why did eBay ban Google Checkout?

    reply to this | link to this | view in thread ]

  12. identicon
    Guru80, Jun 13th, 2007 @ 6:30pm

    Prices, why I quit selling on eBay

    I, for all intensive purposes, have quit selling on eBay. I might list an item here and there but my days of listing items weekly is done. Costs and other other B.S. I have dealt with there didn't make it worth the little bit of profit and time I put in. Now I wasn't a major force in the auction world or even close to being a Power Seller and have no desire to.

    I really wish a company such as Google would compete in the Auction business. They would be huge immediately simply because of the traffic Google gets. Advertising via their own search engine and advertising programs would have them take a huge chunk out of eBay's market share almost immediately. Plus continue the free Google Checkout transactions for a while, lower the fees, innovate a little and offer more for less and eBay will look like an outdated dinosaur in the business.

    reply to this | link to this | view in thread ]

  13. identicon
    jake levine, Jun 13th, 2007 @ 6:38pm

    uh...but where does ebay get traffic from?

    so what happened to ebay's traffic numbers when the ads were off? there's a reason you advertise on google...sounds like shooting yourself in the foot.

    reply to this | link to this | view in thread ]

  14. identicon
    simon, Jun 13th, 2007 @ 6:44pm

    what if google

    what if google would filter any eBay/paypal/skype from their searches.... that would be interesting to see :)

    not that i use-it, not that eBay hasn't got on their website a search engine, but still, this would be funny to watch :)

    reply to this | link to this | view in thread ]

  15. identicon
    bay area guy, Jun 13th, 2007 @ 6:57pm

    when was the last time you went to eBay via a goog

    I'm sure there are plenty of businesses that sell products over eBay, and some of those probably advertise on google as well. What does this mean for them? Probably nothing.

    As someone who does neither, I can't see what the fuss is about.

    reply to this | link to this | view in thread ]

  16. identicon
    mr. h, Jun 13th, 2007 @ 7:08pm

    Google take on ebay

    Google should take on eBay in the auction business. It wouldn't take long for them to get big and take a chunk out of eBay's profits. We should all contact google, and get our friends to contact google, and get our friends to get their friends to contact google asking them to start a google auction site. Reply if you want to help me start a movement.

    reply to this | link to this | view in thread ]

  17. identicon
    Matthew, Jun 13th, 2007 @ 7:26pm

    My my, so many google fanboys.

    There's a heck of a lot of google fanboys and ebay bashers out here.

    Have any of you stopped to think what would happen (think "monopoly") if google actually buys out ebay? You think google is going to be any better? Or do you trust google more in the hope that there are humans at google whom you can actually call and talk to?

    Grow up, kids. They are both large corporate entities whose aim is profit. You think google won't squeeze you and make you bleed if they had the chance?

    reply to this | link to this | view in thread ]

  18. identicon
    Charles Griswold, Jun 13th, 2007 @ 7:36pm

    Re: My my, so many google fanboys.

    Have any of you stopped to think what would happen (think "monopoly") if google actually buys out ebay?
    Yeah, I'm thinking that would not be such a good idea. What would be good is if Google started (or acquired) a different auction site and competed directly against eBay. eBay's problem is that it can afford to be bad since it has no competition. Google would be in much the same position if it bought eBay (though I do think that things would improve somewhat). The best thing for the customers is to have multiple competing auction sites.

    reply to this | link to this | view in thread ]

  19. identicon
    Tony, Jun 13th, 2007 @ 9:13pm

    Pull ebay from the serps

    lets hope google pulls ebay from the serps that surely would be a big warning to ebay about the power of google?

    reply to this | link to this | view in thread ]

  20. identicon
    Dave, Jun 14th, 2007 @ 2:13am

    Credit cards only on Google Checkout...

    ...and a credit card is something I don't have! Google Checkout does not compete with PayPal at all, because PayPal allows people who don't have credit cards to shop online, by allowing direct EFT's from bank accounts.

    reply to this | link to this | view in thread ]

  21. identicon
    Anonymous Coward, Jun 14th, 2007 @ 2:30pm

    More than half of these comments, so far, have said that Google should start its own auction site (Id venture at a guess that Google would cleverly call it gBay). I agree that eBay needs some competition and Google is probably in the best position to actually be anywhere close to successful. However there has been no mention of Yahoo's attempt at an auction site. ( If I remember correctly Yahoo started this endeavor when they were still on the level or more so than Google, yet Yahoo Auctions failed miserably. If Google wants to succeed they will need an extremely good business plan to entice new users to their site. I think one of the reasons Yahoo failed is there was not a large variety of items. eBay just dominated there...
    Google may succeed simply because the market has shifted to the point that eBay is loosing long time sellers due increased selling prices or poor/lack of customer service. People are looking for a new place to go, but there are almost no other options...

    reply to this | link to this | view in thread ]

  22. identicon
    Overcast, Jun 18th, 2007 @ 11:40am

    I think Google is in a position to create a directly competing auction site. Heck, I'd use it.

    Yeah... My hobby is working on Muscle Cars.. lol

    But in that - there's a lot of higher priced items and quantity that moves through Ebay in that world. But lately, I've read of case after case of Fraud that Ebay could just careless about.

    No way I'm going to put down $700.00 for something and get stung. I'd rather just pay a Grand and be SURE I'm going to get what I'm paying for.

    A guy on one of the car forums I hang out at, got stung by some guy for $650.00 for an Exhaust system, and Ebay acts like they could care less.

    And PayPal... I won't even go into the issues I've had with them.

    reply to this | link to this | view in thread ]

  23. identicon
    angel, Jul 4th, 2007 @ 2:34pm

    By the way, I have been looking up on the Internet and I have found some tools which are really cools to monitor the positioning of the competition, as well as seeing their tips and tricks. If you are interested, I advised to you have a look. It seems they are free:

    reply to this | link to this | view in thread ]

  24. identicon
    Sue eBay, Aug 13th, 2007 @ 9:55pm

    eBay sucks

    These guys are the worst company in the USA.
    I pray that they one day go the same way that Enron has, or Global Crossing, even how Ford is doing now.

    I have had more problems with eBay..... they have no real people, just robots and webforms. Brutal.

    I can't convey how much I hate these guys..... I'd be 100% behind google if they were to give it a go. And I know a lot of others would as well......

    Google is a giant, plus with youtube...... they can have a big impact can't they?

    reply to this | link to this | view in thread ]

  25. identicon
    jytjyjfries, Oct 21st, 2010 @ 8:52pm

    The only think keeping ebay is alive is that they have a coke name and a pepsi or dr.pepper has yet to stick around.

    Thing about having a coke type of name is - you don't die. Unless you pour out your sweetness and fill it up with glass shards and horse shit for the people who keep your pocket lined. Oh thats right- that is exactly what ebay has been doing over and over year after year.

    Google - To hell with their ad money. Come in treat your sellers right, use your uber technologies and put them out of the picture. About the only company that is right for taking it. No need to let them write you checks when you can just walk in their bank, stake your flag, beat your chest and cry in joy to the thought of these sob's finally and I mean fucking finally dying the death that they so deserve and their monopoly status has insured them from

    reply to this | link to this | view in thread ]

  26. identicon
    joe underwood, Jan 14th, 2013 @ 4:51pm

    Who needs Google

    Granted there are dependent strategies that Google and eBay rely on to assist in the search arena? But if eBay decided to turn into a search engine/directory they can do it along with keeping their own hold on consumer exchange practices. This is no Goliath and the Kid with a Sling Shot contest. I would pick eBay or even little guy Craiglist to survive without Google/Yahoo/Bing (or the rest).

    joe underwood
    Area Code Shopper

    reply to this | link to this | view in thread ]

  27. identicon
    joe underwood, Jan 14th, 2013 @ 5:06pm

    Re: Price

    Not to argue? They will team up behind closed doors and reduce their price for your offering and then make you believe you need to be on both their pages and then when they have you they will get behind those close doors and raise their prices. The system gets you in the end no matter what. And just for saying, they will never even talk to each other about taking advantage of your need they just do it! You have no choice in gas prices (maybe pennies but still no choice).

    joe underwood
    Area Code Shopper

    reply to this | link to this | view in thread ]

  28. identicon
    kadri jarvis, Oct 19th, 2013 @ 1:10pm

    Someone please start a new auction website

    Isn't there anyone here who is smart enough with computers to start a new auction site. So many complaints about ebay everywhere that if there would be alternative people would def use anything that is remotely similar. You can even buy auction software but sadly i'm not good enough wit all this computer business.

    reply to this | link to this | view in thread ]

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