eBay and Google have a tense relationship. eBay is Google's single largest advertiser, buying keywords to drive traffic and purchases to eBay (EBAY) auctions. But Google (GOOG) is also eBay's biggest potential competitor, as consumers realize they can simply search for things to buy on Google instead of going directly to eBay.
With projects like Google Checkout aimed at online sellers, Google is trying to make further inroads into eBay's turf. Not surprisingly, eBay does not allow its sellers to use Google Checkout on its site. (And is plotting its own strike into search territory with its recent announced acquisition of StumbleUpon)
So when Google decided to throw a tongue-in-cheek freedom party in Boston and invited big sellers in town this week for an eBay convention to come check out its Checkout service, eBay pulled all of its ads from Google. And now Google has canceled its party.
The lesson here: Don't mess with a cornered animal.
Update: I'll be on CNBC talking about this with Paul Kedrosky at around 7:30 PM ET tonight. Let me know how I did.
this is old news.
Posted by: dadaf | June 14, 2007 at 05:46 AM
its' [sic] own strike?
teritory [sic]?
recent [sic] announced?
And you do this for a living?
Posted by: Can't You Spell? | June 14, 2007 at 05:51 AM
6% off google revenues overnight, quite a haircut for our dear friends in Mountain View.
Posted by: Bill | June 14, 2007 at 06:23 AM
Actually, I do this on tthe side. But thanks for the spellcheck.
I really should stop doing early morning pre-coffee posts from Flickr with one hand while holding a baby in the other.
Posted by: Erick Schonfeld | June 14, 2007 at 07:03 AM
6% of revenue...that's something!
However, I think I will look at this as a buying opportunity. Those eBay ads on goog are a filler, and they were usually not relevant to the content. I teach internet classes and can assure you that only a small % of businesses in the country know about goog adwords. As more and more people find out about it, the ads are bid up in price. In other words, virtually anyone else will pay MORE for the ads than eBay will.
So, it's some temp pain which will result in future gain.
Posted by: Craig | June 14, 2007 at 07:43 AM
I can't believe Google are the kind that will enjoy being made to back down and look humble at eBays bequest. I sense they may consider it a battle lost but not a lost war...
I've a buck on that being one of the opening shots in the Paypal Checkout war to unfold.....
Posted by: Helen WIlson | June 14, 2007 at 05:54 PM
Well, just as we tell the "little guys" not to rely solely (or too much even) on Google as an advertising partner, even the big guys need to remember not to put too many eggs into one basket. If your business can suffer to a significant degree (and 6% is a significant degree with Google financials I'm sure), on the whims of any one advertiser... well... you need to have another plan to pickup the slack without caving in. Looks like a lack of forethought on Google's part.
Posted by: Jenn | June 15, 2007 at 08:47 AM