Google cancels anti-eBay bash
Published June 15th, 2007
Google had scheduled an event in Boston designed to promote its Checkout service, which competes with eBay’s PayPal service. The event was slated for Thursday night and was intended to draw attendees from a nearby convention sponsored by eBay for its largest sellers.
San Jose, Calif.-based eBay, which also hosted its annual shareholder meeting Thursday morning, responded to the move by pulling all of its ads from Google. The auctioneer is one of Mountain View, Calif.-based Google’s largest advertisers; estimates put the company’s advertising total at about 1% to 2% of Google’s annual revenue.
Google ultimately canceled the Checkout event. But the skirmish highlights the tense relationship between Google, a magnet for large amounts of Internet traffic, and eBay, which siphons off a chunk of that traffic to its own site in exchange for heaps of paid advertising.
“Very questionable decision making on the part of Google,†Tim Boyd of American Technology Research wrote in a note to clients Thursday. “Not only was it the equivalent of giving a 2% customer the brush-off, it could have provided an opportunity for eBay [and other competitors] to get too much visibility into Checkout.â€
Shares of eBay closed up slightly at $31.61 on Thursday. Google shares closed down about 0.5% at $502.84.
While Boyd said eBay’s move presents certain risks, he also called it “an ‘eyebrow-raising’ display of strength.â€
“EBay may not be as dependent on Google for traffic as the market has thought,†Boyd said. “We think it highly unlikely that eBay would pull off such a drastic maneuver unless [the company] was on track for a solid quarter.â€
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