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Implications of the Google/eBay Spat

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Business Rule #1: Don’t tick off your biggest client. Business Rule #2: If a medium works really well for you, keep using it. Business Rule #3: Don’t drive angry. It seems strange that two of the biggest, most successful companies in the world would need a review of Business 101, but Google and eBay may need it.

Big Business Reminder
Big Business Reminder


Okay, so Business Rule #3 is Billy Murray’s advice to a groundhog – but in a metaphoric sense, it seems appropriate.

Recap for those just tuning in:

This week, eBay had a couple of major events planned in Boston – the eBay Developers Conference and eBay Live. Google’s got this PayPal competitor, Checkout, which launched last fall just in time for the Christmas season, and thought it’d be a hoot to throw a party to promote it – in Boston, at the same time as eBay’s shindig, and invite everybody at eBay’s party to their party instead.

EBay, already quite nervous about Google in general (eBay’s been intensifying its relationship with Yahoo already because of this) didn’t like this stunt one bit, and pulled its AdWords campaign in retaliation.

That’s $170 million in retaliation, or about one percent of Google’s ad revenue. Google canceled its party, crying if it wanted to.

The Numbers:

EBay spends (spent) an estimated $450,000 daily on Google ads.*

Google accounts (accounted) for over 10% of eBay’s traffic

Traffic is down only 7% after the yank due to organic results, which make up 25% of Google to eBay traffic.


The Potential Outcomes:

EBay sets a precedent that Google is unnecessary. There are other search engines out there. 

Other search engines aren’t good enough and eBay calms down just in time for the third-quarter ramp up to the holiday shopping season, reinstates its AdWords campaigning.

Neither is affected enough to worry about it. Google finds new clients (emphasis on the plural) to replace eBay, recovering lost revenue. EBay finds organic Google results are enough and continues to enjoy its 94% grip of the online market.

All of the above.

*None of us may miss, however, the automated, nonsensical eBay ads that clutter up the sponsored results. Perhaps, if we were researching Jorge Borges’ literary character Droctulf, we don’t get ads saying "Want to buy Droctulf? Get Droctulf on eBay," or some similar incarnation. That would be impressive. If they could materialize his quasi-fictional Berserker warrior butt, I’d love to hire him as a bodyguard.

 

Implications of the Google/eBay Spat
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  • Thomas

    Can you verify that daily spend number?

    • Jason Lee Miller

      Thanks for bringing that to my attention. I linked to the wrong the source. That daily spend number is an estimate by Merrill Lynch’s Justin Post.

      Cheers.

      • surfer

        Sorry, but these numbers are way off. Can you substantiate your claim about the impact of this on ebay/google traffic.

        • Jason Lee Miller

          the link above goes to a Hitwise traffic report from Bill Tancer

          here it is again

          http://weblogs.hitwise.com/bill-tancer/2007/06/google_ebay_data_on_the_tiff.html