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 Shopping.com was because Shopping.com's AdWords bids kept pushing eBay's AdWords bids higher. By taking out Shopping.com, 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...

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  1. identicon
    Johnson Rice, 13 Jun 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.

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