SAN FRANCISCO, June 13 — It had all the appearances of a marketing stunt gone awry, the Internet industry’s version of a wily playground taunt that quickly escalated into a tense standoff, until the taunter — Google, in this case — blinked.
Here’s what happened. As thousands of eBay’s largest sellers prepared to gather in Boston for their annual eBay-sponsored convention and party this week, Google, the Internet search and advertising giant, decided it would be a good idea to invite those sellers to its own party. Not just any party, either, but one to promote Google Checkout, a payment system that competes with the eBay-owned PayPal and which eBay has banned from its auctions.
“Let Freedom Ring,” read the invitation on an official Google blog. And in classic Google style, it promised “free food, free drinks, free live music — even free massages.”
That did not sit well with eBay, and early Wednesday the IDG News Service reported that eBay had decided to drop all the ads it places on Google’s search engine. EBay is the largest buyer of Google search ads, according to Nielsen/NetRatings.
“I won’t comment whether that was directly tied to Google’s plans to have that party,” said Hani Durzy, an eBay spokesman. He said that eBay was simply running a test — something it does frequently — by shifting marketing dollars to determine the best way to attract users.
That’s not how some people interpreted eBay’s move. “I don’t think anyone believes that any more than we believe that eBay does not allow sellers to use Checkout because the service is unproven,” said Scot Wingo, the chief executive of ChannelAdvisor.com, a company that helps store owners sell on multiple online sites, including eBay.
Regardless, by late Wednesday, Google rescinded the invitation to eBay sellers and canceled the party. “EBay Live attendees have plenty of activities to keep them busy this week in Boston, and we did not want to detract from that activity,” the Google blog read. “After speaking with officials at eBay, we at Google agreed that it was better for us not to feature this event during the eBay Live conference.”
A Google spokesman declined to comment further.
“We are pleased that they apparently have seen that the party was inappropriate,” Mr. Durzy said. “It is not the way one partner should act with another.” Besides being rivals, the companies have a deal for Google to sell ads on eBay sites overseas.
Analysts said eBay’s decision to withdraw its ads is not likely to hurt the search giant. EBay spends less than $25 million on Google a quarter, said Jordan Rohan, an analyst with RBC Capital Markets, or only a tiny fraction of Google’s nearly $3.7 billion in revenue in the latest quarter.
Will eBay bring its ads back to Google? “We have no firm date for how long the experiment will go,” Mr. Durzy said.
[via Russ]
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