TELECOM Digest OnLine - Sorted: EBay to Resume Ads on Google, But Rely on Rivals

EBay to Resume Ads on Google, But Rely on Rivals

Eric Auchard, Reuters (
Sun, 24 Jun 2007 14:06:07 -0500

By Eric Auchard

EBay Inc. said on Friday the online auction leader plans to resume
placing Web advertising through Google Inc., but that it would rely on
alternative advertising services to a greater degree.

EBay is one of the biggest buyers of keyword ads on Google's leading
pay-per-click advertising system, AdWords, using them to promote its
online auctions. It canceled all Google ads 10 days ago in protest
over the Web search company's bid to woo eBay customers to a rival
payment system.

Hani Durzy, a spokesman for San Jose, California-based eBay, said his
company later on Friday would begin advertising on Google, but at
reduced levels than previously. EBay had been buying tens of millions
of keyword ads on Google each year.

"I will tell you it will be in a much more limited way than it was
before," Durzy told Reuters. "What we found is that we were not as
dependent on AdWords as some people thought."

EBay owns PayPal, which, with 143 million accounts, is the world's
most popular online payment service among merchants and
consumers. Last year, Google introduced an alternative payment system
called Google Checkout and has been seeking to woo eBay merchants to
accept direct payments via the rival service.

Now eBay plans to rely to a greater degree of competing advertising
systems from Yahoo Inc., Microsoft Corp.'s MSN, Time Warner Inc.'s
AOL, and IAC/InterActiveCorp's

Google generates virtually all its billions in revenue from AdWords,
which shows related ads alongside Web search results tied to the words
a user types into Google's search service.

The growing rivalry between the two companies' payment services
spilled over at eBay's annual conference for key merchants last week
in Boston when eBay protested Google's plans to hold a competing party
outside the conference hall.

Google was seeking to put pressure on eBay to accept its system on
eBay auction sites. In response, eBay moved to eliminate all
U.S. advertising on Google-affiliated sites. Amid the controversy,
Google aborted its own promotional event.

Despite a broad sell-off in U.S. stocks -- the Dow Jones Industrial
Average was off 1.3 percent -- shares of both eBay and Google rose on
Nasdaq. EBay was up 2.2 percent at $31.81 while Google added 1.5
percent to $521.77. Yahoo was down 0.8 percent at $27.45.

Copyright 2007 Reuters Limited.

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