In Web Bout, eBay Wins by Hitting Google in the Wallet

Note to Search Giant: Keep Your Guard up

By Published on .

It's the prizefight of the century! That Goliath of search, Google -- unbeaten, undefeated -- vs. the champion of the auction world, eBay -- tough, wise survivor of the dot-com crash.

Round one! Google lands the first punch, deciding that search is not enough. Google Checkout is launched in June 2006 to take on eBay's PayPal in the online payments space.

Round two! Google throws a series of blows. Checkout merchants get fee-free transactions and cash to entice customers to sign up. Google advertisers using Checkout get even bigger Checkout badges next to their ads. Google Product Search makes it easier for searchers to filter out all but Checkout merchants. EBay calls for help, and Yahoo leaps into the ring, adding PayPal icons to paid search results for advertisers selling through eBay's payment system.
Danny Sullivan
Photo: Jason Meyer
Danny Sullivan has been covering the search-marketing industry for more than a decade and is editor in chief of

Round three! Google decides to crash last week's eBay Live event in Boston. It throws a bash titled "Let Freedom Ring" for eBay merchants to get them to lobby for Checkout to be accepted. EBay hits back, pulling all its U.S. ads from Google (worth between $100 million to $300 million annually, according to estimates). EBay calls the move an advertising "experiment."

Wham! Google goes down as it makes its own unconnected decision to scrap the party so not to "detract" from eBay Live. Many advertisers in the crowd leap to their feet, amazed that Google was beaten.

Is this the start of a new era? Perhaps. Google has taken years to begrudgingly give advertisers more control, such as last week's change to show exactly where ads appear in the content network.

Collectively, advertisers carry more weight than eBay alone. They could pressure the giant to be more responsive. EBay gives them hope.

Then again, there's a cost. EBay is saving money, but it is giving up 16% of its total search traffic generated from paid ads at Google, according to ComScore. Pulling ads is unlikely to be a long-term move, and some advertisers are happy to see eBay's often poorly relevant ads come out of the marketplace.

Still, it's a fight worth remembering. Google, no stranger these days to disputes and willing to fight, backed down immediately when hit where it hurt: the pocketbook.
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