Ebay Gets Mad at Google, Punches Self in Head

I haven’t commented on this nutty eBay-Google catfight, but I can’t restrain myself. With Google representing something like 5% of Ebay’s lead traffic (versus the 3% of Google revs represented by Ebay), exiting Google’s Adsense network in response to an ill-thought (and now aborted) Google Checkout event strikes me as silly, sort of like getting pissed at someone else and then punching yourself in the head.

Okay, okay, sure Google was ham-handed planning their event coincident with Ebay’s event, and sure, Google is overly precious in pretending to not compete with people it demonstrably competes with, but this is still dopey.


  1. dub dub says:

    Do you have a source for the 5% claim? Any way to distinguish “real” traffic from clickbot/other bogus traffic?
    Maybe ebay’s doing an experiment to see what happens when these “leads” go away, and they are using the event thing as a pretext.
    Hard to understand true motives without more information…

  2. And yet — it worked, didn’t it?
    I don’t see why % of leads is meaningfully comparable to % of total revenues. I’m sure EBay’s Google advertising has positive ROI for them, but it might be only a tiny advantage over EBay’s next-best marketing options, and a tiny contribution to EBay’s bottom line… much much less than 3% of all revenues.

  3. Tomas Sancio says:

    Google checkout is definitely after Paypal without offering anything in terms of competitive advantages other than discounts to Adwords customers. This sounds like Microsoft bullying, not like Google innovation. That’s maybe the reason why eBay is upset with Google.

  4. Schticky Stan says:

    I heard it was 5.9% of Google’s revs.

  5. I’m not convinced eBay needs to advertise on Google. At any rate, this will be a fascinating experiment. If, in fact, they suffer relatively little consequences as a result of pulling their ads, the consequences could be devastating for Google.

  6. I agree with Joe. This is a fascinating experiment. The whole game for the online retailers is getting direct traffic and avoiding the online-marketing spend.
    Ebay deciding to advertise via Adwords always struck me as a Faustian bargain. As long as you train customers to go through Google, you end up paying a permanent “tax”, while if you just focused on driving the customers directly to your site, you would capture all of the economics. It seems that the big players are in a good position to pull this off – Ebay and Amazon are the only two that come to mind.
    Looking at the financials, the only difference between a site like Amazon and Overstock.com is that Overstock pays 10% of revenues on marketing and Amazon spends 2%. The reason is that customers go directly to Amazon, while they tend to go to Overstock through keywords and other third-party online ad channels. That directly results in an 8% operating margin differential.

  7. couldn’t agree more. eBay may have won the battle, but they’ll lose the war if they keep playing it that way.
    eBay needs the Goog’s traffic WAY more than Goog needs eBay’s ad dollars. and if that ain’t true today, just wait a year… noting the difference in Goog vs eBay growth rate, it won’t be long before Goog can afford to do it again and not blink.
    once again, the folks at eBay respond to competition with policy moves & legal tactics & negotiating hardball, rather than innovation and better products.
    eventually, it will come back to bite them in the ass.