Welcome to the jungle – eBay vs Google
Robbie on 06 15, 2007
Every once in a while, a corporate cat fight in the tech world breaks out that demands my attention. Recently, eBay pulled all of its advertising from Google’s U.S. network. Apparently, Google crashed eBay’s user conference, eBay Live, and went about hawking its online payment service, Google Checkout. They’ve also been lobbying eBay to start accepting Checkout.
Needless to say, eBay wasn’t too pleased with Google’s action. Especially since Checkout is a rival to eBay’s dominant PayPal and eBay is Google’s largest U.S. customer. In fact, eBay runs more than double the number of ads as Google’s #2 customer (Target). I’m sure there is competitive tension between eBay’s Skype and Google’s Talk IM products which won’t help matters any.
Anyway, an eBay spokesman described the abrupt advertising freeze as an experiment, to see if eBay can get better financial returns from Google’s rivals. It’ll be very interesting to see if how this battle plays out for many reasons… eBay is playing the life without Google game with real money. Analysts estimate that eBay’s business represents 1% of total gross of Google’s revenues, about $170 million/year. This move obviously isn’t fatal, but it’s big enough to hurt and leave a bruise.
In any event, eBay’s move sets a very interesting precedent. What happens if other partners and Google advertisers decide the best way to counter their fear of Google is to hit back? Although Microsoft’s search efforts have been much maligned, it is better than the common perception. Perhaps, this is the break Microsoft or Yahoo needed in order steel some of Google’s thunder?
At any rate, the best theory I’ve heard so far is that eBay’s 2nd quarter is in the bag, and they want to give Google something to think about, before they go back to business as usual in the 3rd quarter. eBay can’t really break their Google addiction, can they? If eBay can live without Google, will others be brave enough to follow? Is your online advertising strategy merely getting Google love at any cost or is it more diversified?
About the Author: Robbie Paplin
- Author's website: http://www.caffeinatedsoftware.com/
- More posts by Robbie
- email the author
8 Responses to “Welcome to the jungle – eBay vs Google”
Leave a Reply
Live Comment Preview
Popular Posts
Recent Posts
Recent Comments
- Rhonda Porter: Some of the fine tun
- Rhonda Porter: you must be so excit
- Jerry Gropp Architect AIA: Hi Rhonda- Good to s
- Chris Cliff: I am glad to see the
- Leanne Finlay: Tim, eventually I'll
I find this a fascinating story and I’m glad you picked it up… I thought about writing an article about how this relates to real estate, because I’m still pretty sure that Google would love to chip away at the real estate industry (as oppose to do anything so drastic as this ebay mistake!). Nonetheless, I’m actually surprised at how slow Google is moving and expected them to put a much stronger real estate foot forward a while back..
Yeah, I thought it was a fascinating story as well. Anytime a big company’s best customer is unhappy to the point of leaving or actively exploring alternatives, it’s news worthy. Especially, if you’re Google.
I think Google is very focused on solidifying is search / online advertising dominance and it’s too busy trying to change the internet / software game to Microsoft’s disadvantage to worry about dominating digital real estate. As I said back when you did your GoogleBase matters post, I believe Google thinks real estate is just an interesting diversion. Google is a big game hunter, and Microsoft is the biggest prey of them all.
I can’t say I’m surprised by Google’s slow progress. Other than Move, I can’t think of a single real estate internet/software company that’s making enough money to grab Google’s attention. All the successful companies are small or fledging start-ups who’s long term future is uncertain.
Despite GoogleBase’s slow evolution, the success of their online advertising platform is still the envy of the online world.
This is a great story. It would be really interesting to see how google would be effected by the loss of their largest customer, but I think ebay relys somewhat heavily on adwords as a source of revenue.
I’ve read that about 5 or 6% of eBay’s traffic comes from Google. Granted, other search engines could step and in fill void, but I think eBay needs Google, more than Google needs eBay at this point. Hence the reason, why I think it’s an end of quarter negotiation tactic /point maker. If this continues for more than 30 days, then this becomes a real story.
Bill Gates has said, “We’re going to keep Google honest”. Hopefully, Microsoft, Yahoo and Ask will have the opportunity to earn (and keep) more of eBay’s business because of Google’s arrogance.
Hi Robbie,
Great post!! Thanks for bringing this “cat fight” to our attention. You’ll have to tell us what, if anything, develops.
Yes, Google is so powerful these days. Owning ’search’ and all the traffic that goes with it. I’m surprised that eBay took that aggressive action. Nobody else has tried to mess with Google. If Google keeps improving search I don’t think anyone can catch them. Then they have the street side visual tool. That certainly relates to real estate. I could see how companies could give those interested access to property via the Internet.
FYI – Here’s Time magazine’s take. I’m also surprised eBay took such an aggressive action. If nothing else, we now know eBay’s willing to bring out the brass knuckles when PayPal gets picked on.
[...] It was a Busy Week in the Jungle June 25, 2007 eBay and Google kind of make up – sort ofNearly 2 weeks ago, I relayed the story of eBay & Google’s corporate cat fight. Well, eBay has decided resume their advertising on Google, but they will be relying on alternative advertising services to a greater degree. This is good news for Yahoo and Microsoft and it could be good news for you. You see, one potentially positive side effect of eBay of advertising less on Google, is that it might be easier for the rest of the world to win AdWords keyword auctions. If eBay bids less aggressively or doesn’t bid at all on certain terms, the reduced demand may push prices lower. Probably won’t happen, but it’s a nice thought anyway… [...]