eBay Stares Down Google And Wins

I wonder if some Product Marketing Manager at Google on the Google Checkout product just lost his job because he decided to try and steal some Paypal merchants. This smacks of a decision made at a low level without thought of the high level consequences.

As Google enters more and more markets, this type of thing could become much more common. I am not worried about parties being canceled (I never even received any invitations to any of them), but the core competitive nature and level of collaboration that is happening between companies.

How the companies balance them will be interesting to see.

This totally makes sense. I’m wondering if the company that supposedly does no evil gets their definition of “evil” from the same dictionary that Bill Clinton uses. How many people have felt that Google has done evil against them? I have, more than once. (I cringe as I write this, hoping they don’t get po’d and do more evil against my accounts)

Jason Alba
CEO - JibberJobber.com
because no job is secure… not even yours!

Jason - google was throwing a party. they want ebay merchants to have the choice to use their checkout product. that isn’t anywhere close to acting evil.

well ebay also shouldn’t buy the entire dictionary and use PPC for it. Doing a search for “dead puppies”, “used diapers” and “lasting legacy” all give me “Find it on ebay!” results. And PayPal should get at least minimal customer service.

google was using a very aggressive marketing tactic …

ebay returned the aggression (good move) …

google caved …

no one did anything wrong here, but also no one has the moral high ground.

I don’t think eBay was a bully - they responded to an attempt by Google to “take” away their most important customers.

Will Google stock feel a hit tomorrow?

From the looks of the adverts here on TC, PayPal is still on Google Advertising. Perhaps next move is rook to b5: Google axes PayPal from advertising.

I just read an analysis that eBay is one of largest users of Adwords…their marketing budget is approx is huge (~1.2B?) with 62% of that going online (annual report). They could be as much as 3% of Google’s advertising revenues according to the analysis I read. No wonder Google stood down!

Good for EBay….

http://www.whatshottoday.com/i.....Itemid=279

I’m surprised at all the ebay love. All of their primary assets are walled gardens - payments, reputation, skype, ebay listings.

#8 Chandra - but going back to my original q - did they put the ads back or are they gone?

If so, and your numbers are correct, look for a dip in goog in the am.

Here is an article about it on reuters:
http://www.reuters.com/article.....9620070613

eBay was disappointed about the Google event. “We don’t view that kind of activity as an appropriate activity for one partner to do to another.”

I have never used google checkout I often use paypal in all my sites.
It is hard for google to break into the ebays paypal market.

Michael - remember that an enemy of your enemy is a friend. (or something like that).

I hate the triple fee ripoff on eBay. I like that I can sell anything and since they opened their doors have always been able to get what I wanted for the items.

If eBay was a country, counting their sellers as employees, it would be the 9th largest country in the world.

good for ebay! it’s pretty clear that google checkout has been a flop so far.

I think ebay’s in trouble. Just my .2

google will look for startup friends.

Ouch, talk about overpowered. Not very good for competition.

This looks pretty serious… I tried googling for a few keywords like Wii, laptop, and all the usual stuff that should bring up the “Buy at Ebay” ad but did not see any. The only query that came up with an Ebay Ad is a search for Ebay.

If Ebay is stopping all Ads, then this is a huge blow for Google. Surely, we’ll see quite a few heads rolling internally at Google.. you think?

Do I understand this correctly? eBay uses commercial leverage to reduce choice for its customers, or at least deny them a night out on Google’s dime. The leverage? It threatens to reduce traffic to eBay customers by reducing its ad spending with the top ad network. “If you compliment my kid I’ll spank him”

Sounds like Visa crowing in an ad campaign that you should use their cards because they paid famous merchants not to take Amex.

Google was doing what they should be to drum up business. eBay was sleazy here. Give that Google PM a bonus (not that the poor guy needs it).

This incident just proves that the BS about “frenemies” or “coopetition” that runs rampant on the web *isn’t* sustainable, nor should it be. These large cap Internet companies are competitors. Google competes with eBay, Yahoo, MSN, FIM, Viacom, Time Warner, AOL & NBC.

To think they can all coexist without clashes like this is ridiculous. We should all expect — almost demand — hardcore, bare-knuckles competition. It’s good for markets to have fierce competition. The airlines all hate each other, and competition is now extreme, and prices are relatively low as a result.

The web is different for some reason. The friend crap should end. Maybe this is the watershed event that kicks things into gear!

I guess Google should stick to throwing their weight around with small companies they can afford to buy.

but google could erase ebay from their index and not show ebay adwords on search words. i though the balance of power was always in google’s hands???

the words “nose”, “spite” and “cut off” spring to mind. What a puerile move by ebay. They obviously use adwords as it drives significant traffic

Why did Microsoft have to allow competitor ISP and browsers to be pre-installed on the OS whereas a website such as eBay can force people to only use ONE (their own) online transaction system?

PayPal works well but their customer service is abysmal, IMHO. I wish they’d have some competition, in the form of Google Checkout or something else. At the same time, it is easy to understand their reaction of fear considering that Google is the only company that has been able to freak out the biggest bully of all, Microsoft. eBay is freaking out for its money machine too. Maybe it will be good for the government to look at eBay’s quasimonopoly in this space at some point in the future (this is the kind of things governments are good for). Really, it is not normal, in a system handling so many transactions on a daily basis, that the only convenient and secure way to complete said transactions is owned by them.

Good for Ebay. Google needs to be notched down a few, and it’s better done in the “field” then to have the Feds come in and teabag them. Mind you, I’m not much of an Ebay fan, butt hay…

Maybe Google could start the revolution by requiring that anyone using AdWords be required to provide Google Checkout support if the goods they advertise are sold online?

This recent report from comscore shows ebay being the number 1 and 3 search marketer for an almost 6% share. Don’t forget Shopping.com.

http://www.dmnews.com/cms/dm-n.....41433.html

That could ding a growth stock pretty good.

eBay doesn’t look like a bully. It just made itself badass today and standing up for their entities.

How dare them.

Uuugh. I have much love for eBay but not their horrible PayPal. Good for Google… at least with Google Checkout I can use a credit card without being hounded. PayPal’s fraud protection is terrible, and they have no customer service.

I don’t think Google will back off that easily. I wonder what will happen to the SERPs over the next days.
I remember that shop names/profiles rank very high in Google. So do many ended auctions. Sounds supplemental index to me.

Finally, forget the web2.0 hugging. Business will come to life. The next two years might become interesting. Watch out for the Big Players to invest in FaceBook apps and all grow a share in FB’s popularity.
FaceBook where anyone is welcome.

Come on google! Fight back! Paypal is horrible. They always bully the most vulnerable, the sellers, cause on buyer’s side, they have to fight the banks. They treat every merchant as a criminal and take money from their accounts whenever they like without explicit explanations. The only reason that Paypal can blatantly ignore customer’s outrage is that they are the only player in the game. You want to sell on eBay? You have no choice!!! Take a look at paypalwarning.com/, horrible…

Jean-Michel, please check out the Google Checkout and Paypal alternative - http://www.kushcash.com

Google should have put their product where their mouth is. If adwords are better than the alternative (yahoo words or whatever they are called) then pony up and see who does worse out of ebay and google out of the whole thing.

I think it was a bluff by ebay and google has set precedent that they are pussies when you pull ad revenue away from them.

ebay is not bully,
it is business world,
and just want to take advantage from each other.

Hey, I finally got a direct response from Michael Arrington … kewl!!

I think what they did, inviting partner/competitor’s clients (online sellers) to a “party” to show them there are alternatives. (I want to know which seller DIDN’T know about alternatives) It seems to me that the partner, paypal/ebay would be pretty pissed. I would be. It’s a slap in the face, considering the partnership is going well (or at least significant (see comment #8)).

If they did this to any of the smaller payment sites (like comment #33) wouldn’t this have been considered *more* rotten?

Definition of evil is subjective, but I’ve been crossed by the evil Google with adwords. Talk about no support, no recourse. Give me a break - Google walks all over everyone, they eat up some companies and make people very, very wealthy, but they also destroy other companies. They are the eight thousand pound gorilla.

This was a low blow, imho, and it was cool that eBay had the power to fight back. I wonder what other companies has the power to fight against Google.

Now, having said that, I *heart* Google, and use them all the time, with various services. Again, I’m hoping that someone doesn’t get upset and take down my services :/

Jason Alba
CEO - JibberJobber.com
… because I’ll never be allowed to work at Google (I’m not smart enough)…

good for ebay. google was being stupid to think they could promote their services on ebay’s dime.

Ebay let’s people use Western Union or Money Orders but not Google Checkout? That doesn’t sound very good.

If Ebay was to pull all of its ads from Google, and if their spend on Adwords were 3% of Google’s Ad revenue, that does not mean they lose that 3%.
Here is why:

- It’s a bidding system; there are many other advertisers waiting behind ebay to take its place for each keyword. If there was not ebay ad to click, there will be some other ad, and Google will make its money.

- There tens of thousands of eBay affiliates, who will happily take eBay’s place to bid on those keywords, and Google will make its money.

Lastly, if ebay and google went on a full war, Google would win it, no doubt. If was a wimpy move on them to cancel a party called “Google Checkout Freedom Party”. You can’t back down on freedom man, as Bust would say.

They bent over for eBay, like they did for China.
Google, have some bones and reinstate the party! I’ll drive from NY for free food and booze, even though I don’t use ebay much.

I wonder how ebay’s revenue will show for this quarter if the ads don’t return. (And I would love if Google would just kill ebay from the search results. It would *KILL* ebay stock )

fundamentally this is a silly marketing move by Google. You dont rub wrong side of your biggest client. duh !! dont bite the hand that feeds you.

Anyway, it is a lesson for both companies. For Ebay - dont depend too much on Google, they are too wily and dont mind doing ‘evil’.

For Google, maybe it is time you act like big brother, than a silly tyrant. maybe they should have held the party…

Shit, I would praise Baby Jesus if eBay pulled their Google ads. No matter what I search for, there’s always an ad to “Find ___ on eBay!” even if it’s something completely intangible. Freaking so annoying.

who do you think really suffers if Ebay pulls out of Google? There’s a reason Ebay buys practically every word in the English dictionary…they need the traffic…Q: who’s got the faster organic growth rate? A: “you can’t find it at Ebay…(insert lame jingle here). Power sellers can save on the ridiculous Ebay fees and move their stuff through Adwords….Ebay threw the baby out w/ the bathwater. I give their “marketing experiment” a couple days tops. Google should just write a check and we can start calling it Gbay.

I think this event just triggered my alarm clock. In other words eBay’s corporate development team may be “searching” for an alternative platform and I have an idea what it is. AND no it’s not Yahoo or Microsoft…. as a matter of fact, I’m not even sure it has been written about in Techcrunch, yet.

It will be interesting to see how this works out in a couple of months, to see who needs who more. eBay may be Google’s biggest client but not their only one.

Well boohoo eBay, Google has a competing product and you don’t want anyone to use it. Grow the hell up. Google has the best, biggest and most popular search engine, maybe you should feel how it is to be dropped in the serps for a day or two, I am sure Google would just call it an “update”.

If MySpace blocks Photobucket, then according to you, Mike, “MySpace showed who is the boss”. If eBay threatens to pull all advertising from Google, then according to you, Mike, “eBay is acting as a bully”. May we, the readers, dare ask, why you are starting to maintain double standards in writing these days

No love for e-bay here as it acted to preserve its monopoly position rather than tolerate competition, a move that was about as customer friendly as AT&T’s decision to rat on its users to protect a new business model.

Also, Paypal is a fucking nightmare when it screws up and whilst we are on the subject of large corps restricting transactions to one payment system lets hear it for Yahoo ref:

“I’m very sorry to hear about your PayPal complaint. Eventually, we will offer other payment options. However, all online transactions for Flickr go through PayPal.”

news just in…google is acquiring Ebay!

joking -_-

GOOG should buy Ebay. Ebay is so mismanaged that GOOG would be able to take ebay and paypal and milk money out of these properties day and night while still making them better for the end user. I highly doubt the FTC would go for the combo though.

Rdahl, thanks for the link to Kushcash. Looks very cool. I hope they’ll have a widget for the my upcoming iPhone!

Google should have made Google Checkout a real paypal killer. Instead they only focused on the stores. If they had a user-to-user transaction service, they wouldn’t have to rely on ebay allowing their services.

Users would jump ship the second google would announce it. The only reason majority of people use paypal, is because its the biggest player in the game.

#19 Paul,

You are right. It’s so wrong for eBay to do this, ruining eBay sellers plan to get hammered on Google’s money & getting free massages. (they wouldn’t use gcheckout anyways)

Though I’m not fond of e-Bay and Paypal, I’m quite happy with e-Bay’s act. Google’s plan is obvious… taking control the internet.

Michael,
How is PayPal a walled garden? A payment system that holds a balance has to adhere by a lot of regulations and can just open itself up to exchange money with other institutions. PayPal is just a better, more international, more robust, and more secure product than Google Checkout. PayPal invented alternative online payments and stood strong as hundreds of others tried and failed. Google Checkout is a complete joke of a product with a laughable customer acquisition cost. The main reason merchants use it is because it’s free and the main reason buyers use it (once) is for the promotions. Neither is sustainable.

eBay blocks Google Checkout because it is an unproven payment system with a shaky history that is less than a year old. I strongly believe that only pride on the part of Google will keep this loss leader product alive.

Bravo to eBay on a gutsy move that paid off!!

Keep in mind that this is nothing new for eBay. They tried to shut out PayPal initially and force sellers to use their in-house option, BillPoint (I think that’s what it was called). The sellers revolted and eBay conceded, allowing PayPal to become the payment standard on eBay, and then buying PayPal in order to own the entire transaction. Obviously, eBay can’t buy Google Checkout but you better believe that they intend to fight like hell to keep it out of their marketplace. eBay threw down the gauntlet today and, essentially, won this round.

I’m not tacking sides here, eBay is being a bully and is acting in its own best interest, not the best interest of it sellers, what a shame. But, eBay is a major customer of Google, and Google should treat its customers better. Checkout certainly has not gained the traction they had hoped for, but eBay/PayPal should not be the only show in town.

while I like a bit of drama, it seems like both web darlings are showing their nasty side here.

crimsonquaker, how much did eBay pay you to write that?

GOOG more and more is acting like Oracle, resorting to cheap gimmicks to capture market share. Hopefully it will bite the dust like Oracle too, killed by MySQL. cheap.

Google is becoming crappy. Other than the AdWords, nothing works. I used Checkout, bought some stuff on Dockers. The entire process was clue less. They need to spend more time on Checkout than inviting users for free massage and food. Stupid people. shows lack of experiece.

PayPal is lot better, all said and done.

This is just childish for Google and one would not expect this type of thing from a MicroSoft competitor. I mean using phrases like “Boston Tea Party” to get people away from eBay Live, which is eBay’s biggest event of the year.

Well, this is what they posted now on their blog:

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. 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.

Well, I love google, btw. who won’t

Nice move from ebay.

i think the tactics used in this episode is not dignified or good enough for companies of the size of Google and E Bay . Every one has a right to protect their users , at the same time everone has a right ot expand there user base but a code of conduct should not be broken . we are not a high school gang

It’s a smart move for google to back out. This is not just about the 3% of their adwords revenue. It’s more about keeping allies rather than annoying them and pushing them away. For as much as google does these days, it is just prudent for google not to declare war on another giant.

eBay is a senstive firm it seems, the competition ebay faces comes from small startup e-auctions (not much of a threat) and facebook marketplace (major threat), however one never saw google as a threat to eBay, more like a complimentary firm whereby users would pass from google->ebay and vice versa.. I suppose google checkout must have sparked the competition flags with eBay’s paypal and although eBay’s prime busines (auctions) is not directly threatened, its other business (paypal) is..

Should the two giants be compeitiors or become allies?
StAndrewsFund.com - Free Investment Reports from Student Economist.

I’m amazed how PayPal isn’t considered a monopoly and ebay’s limiting of google checkout anticompetitive.

Whole thing about Google Checkout not being trustable enough sounds like total crap.

/me waits for the day ebay is forced to allow google

I can bet you if ebay allowed goog checkout, they’d see enough to make an impact on their next quarter’s finances. With google checkout’s zero commission until 2008 plan, it is a no brainer for most big time ebay sellers.

#45
The bully makes more sense when there is direct $s involved. In MySpace/PhotoBucket saga, it was a fight of eyeballs and ad views.

Here we’ve one company that gets to dictate what the commission % should be for most of the stuff that is sold through it. In the process it hurts the sellers, the buyers. Add google and paypal would have to compete with google’s commission %.

I think ebay have every right to stop other payment providers. They built the business, paid a lot of money for paypal, continue to grow paypal.

if you owned an auction house would you allow a rival to come in and start processing all your sales.

I think it was petty of google to try this. I also think it was a great move by ebay to protect itself.

Classic. Happens all the time in non-Internet businesses: commercial partner A wants to launch a competing product of commercial partner B; commercial partner B threatens to take his business elsewhere; commercial partner A retracts.

Still… wow, bold move from eBay, showing that the biggest clients of Google have lots of leverage.

Jean-Michel, The http://www.kushcash.com Widget is coming - thanks for asking!

I think Google Checkout would gain more merchants if they lowered their rates. They seem too high. Also, Ebay needs to get PayPal customer service working - more bodies providing real support.

As for what Google did - they are now hostage to their share price. They have to keep expanding, and this makes them appear concerned about their product. It smacks more of MS than Google - not good pr.

It is fun to watch from the sidelines.

But, if/when Google’s share price drops because their growth slows, it will have an impact on all the other big players and the industry as a whole….
which means us.

Google has the problem that as it gets bigger so the original intent becomes watered down or even corrupted. Some of the people they employ will do the “no evil” talk, but in reality they will want to use the power and influence of their employer to throw their weight around.

Anyway, I don’t expect a rematch soon.

Paypal vs Google, Microsoft vs Google and now Ebay vs Google… I guess when you start developing a long list of opponents… you are making some progress! I think Google should just buy Paypal and Ebay with their hord of cash and go right for M$… then we got a battle royale!

Jon

i agree with you, pushing the envelope a bit to see what would happen, testing the waters, good fun, ahhhh power and money!!!!

for google -> this means war. Google Auctions! on the way! and of course a perfect system Hell yeah, less % on checkouts, less auction fees.. I have a strong feeling google have something on the way (even though google never developed user content portals)

Google Auction? I think they would rather buy eBay.

I am soooooo hoping Google does not flinch here.
Things may go back and forth here, but now the hen is out of the roost.

As an ex-ecommerce company owner, this can only be a good transition.

It is so lovely seeing all the real merchants ranking higher on Google AdWords.

I used to hate selling some side-stock on ebay. They get you for the ebay sale charge, then get you again to use a quick PayPal payment method for another %.

I am rooting for Google Checkout personally. I don’t see google as a bully, I see them as an Equalizing Force that fights against monopoly’s.

I.e. Microsoft Office.

@Malte

Ebay is a fellow Titan. This is not a “Buy situation”.

This is a very historic day for mankind.

Quote me.

A very eerie vision of the near future without Net Neutrality. You can expect to see more of this type of thing as the old guard dies off, like:

“We’re sorry but ComCast will not provide you with access this website, since it is not one of our valued partners. Please choose an alternative…”

“We’re sorry but software that uses the GLP3 license cannot be installed on this Windows Vista computer. You may purchase a Microsoft alternative by clicking the OK button below…”

Save the Internets!
http://www.savetheinternet.com/=faq

@Jon

EBAY *IS* PayPal

SO your list of Google opponents has just been shortened.

Is competition a bad thing?

I refuse to sell on Ebay personally. Can’t WAIT till there is a viable auction house besides Ebay.

@Todd

I love it!! I can here the femine female computer voice now…

Investers should really pony up around a famous auction name a build the next killer app (there is delta, united, TWA, others).

Anyone for Christy’s.com or Lloyds.com?

A perfect opportunity now exists for another major auction site/e-tailer to take up the void left by eBay on Google Ads (maybe Amazon?), and CPC rates will probably change for a good number of keywords. Competition in the auction/e-tailing space has intensified with the likes of Facebook and social shopping. Adding to that, international expansion has been disappointing for eBay such as China. So where’s the growth? Sure, eBay should be pissed off with Google for starting a Paypal competitor but in the end, its eBay that needs Google more.

You have to defend your customers / if someone was going to take any of my customers / I would consider loosening my advertising budget with them for sure.

- I think google / should / would bring an antitrust case with Ebay - if they wouldn’t pull all their ads from google.

- Who would that hurt more anyways? , Google? or Ebay?

-RB

wow google, way to be weak

All the people saying Ebay has to defend its customer base, sure, but you can’t do it by blocking out a competitor for competitive reasons. That is called incompetitive and in most ways is illegal.

Would you be ok if Microsoft shipped IE and disabled firefox from installing on Windows? Ebay’s product is paypal and they’ve disabled a competing product in Google Checkout.

It is sad, i m one of the media visitor during eBay live 2007, seeing this news here…

sad…i m one of the media visitor here ebay live 2007

As a long time seller on eBay and Paypal, I couldn’t be more disappointed with the level of customer service I’ve received from both of these abysmal companies. Last year my company’s sales on eBay were $100k. This year, I’ve closed my eBay Store, and my sales won’t reach $5k.

eBay has completely alienated me and I won’t come back. I’ve taken my business to Amazon.com.

I am completely fed up with numerous issues, including:
* Multiple fee increases for Store sellers.
* Reduction in ad spending for Store sellers with Google (You can no longer find a product for sale from a Google search that originates in a FIXED price auction. If people can’t find your store, you won’t sell a thing on eBay.)
* Rampant FRAUD (causing a loss of revenue from listing fees that aren’t refunded and many more man-hours spent trying to resolve the problems).
* Non-existent customer support: On a scale of 1-10, I rate the customer service from both eBay and Paypal a ZERO.
I wish they’d have more competition. I was very excited when I heard about Google Checkout, and am extremely disappointed that Google and eBay have not been able to work out an agreement for an alternative payment option.
EBAY NEEDS GOOGLE MORE THAN GOOGLE NEEDS EBAY. eBay only makes money when people purchase a product. If you can’t find the product on Google, then your product won’t sell. Why is this so hard for them to understand? Paul

I like what eBay did and I don’t think that it fundamentally had to do with the concept of Goog marketing to eBay customers. I think the key thing here is that they did it right next door to eBay live.

If Google want’s to go and try to acquire customers who are eBay sellers, that’s fine. But what would tick me off if I was eBay was that I spent a ton of money to set up eBay live and bring, what, 15,000 people into town only to have Goog start poaching? It would be like I spent the day fishing and caught a bunch of fish and then somebody comes up and steals one out of my bucket. If they wanted to throw a line in and fish with me, no problem, let’s compete.

Good for eBay.

Google’s counter move if they want to play this game.

Drop all eBay properties from their index.

I have no love for eBay, they are in serious need of competition and a good lick in the pants.

Paul, having read through all the comments, I find that you have posted almost exactly what I intended to post.
If Google ever decided to enter the auction market, I would be one of the first at the door, followed, I genuinely believe, by many other Powersellers who are sick and tired of being bullied by eBay, with their lack of support, and continual, “We are only a venue” B.S.