EBay Strikes an Ad Deal With Google
The deal is noteworthy not only because the two companies are increasingly in direct competition — in areas like online phone service, payment and product listings — but also because eBay signed a similar partnership in May with Yahoo that included ads on domestic pages. That alliance was seen as a way to counter the growing power of Google.
Google is the leader in selling text advertisements on the Internet. In this business, it dwarfs Yahoo, especially in Europe. So as eBay looks to build its international advertising revenue, Google was in a position to offer a better deal than Yahoo.
“Google is very strong in every country outside of the United States,” said Meg Whitman, eBay’s chief executive, in an interview Sunday night. “We felt this arrangement of assets made sense.”
But the alliance is a striking one from a competitive standpoint. Investors have worried that eBay’s growth could slow because buyers can increasingly use search engines like Google to find obscure products.
And Google has been moving into each of eBay’s main businesses: Google Base lists products for sale; Google Checkout competes in some ways with eBay’s PayPal; and Google Talk is an alternative to eBay’s Skype online phone service.
As part of their deal, eBay and Google will build a “click to call” advertising system that will use both Skype and the much-smaller Google Talk. Ads on Google and products listed on eBay will have a click-to-call link that will allow users to have a conversation with the advertiser or product seller.
The companies expect that merchants will pay a fee — which Google and eBay will split — for each call they receive; this aspect of the deal involves both the United States and other countries.
“This is all about getting the customer to buy quicker,” said Eric E. Schmidt, Google’s chief executive.
EBay had said it would explore a click-to-call system with Yahoo, but Ms. Whitman said that such a deal made more sense with Google, which has a much larger share of the worldwide search market.