Google: Meg Whitman is Not To Be Screwed With

Link: eBay pulls U.S. ads from Google AdWords network

"eBay has pulled its advertising from Google’s AdWords network in the United States, an eBay spokesman said on Wednesday. Technology trade publication Computerworld, which originally reported the move, cited a source as saying it was in response to Google’s decision to hold a party starting at the same time as an eBay conference for merchants who sell on its site."

I’m surprised this didn’t get more attention today, since eBay’s annual Google spend is what the money men like to refer to as "materially significant". I wonder why Google is willing to sacrifice one of its biggest customers to promote an also-ran payment system that is squarely outside of its core competency?

Update: I saw more belated stories and posts on this in the past 24 hours, including a good one from former eBayer Shri Mahesh defending eBay and suggesting that eBay "won", which I’m not sure about. This particular battle isn’t over and the overall war is just starting.

There’s some more good comments from Paul Kedrosky suggesting that eBay is hurting themselves by boycotting AdWords. eBay may indeed be hurting itself in a business sense, but there are also reputational effects to consider when this kind of thing happens, and I don’t think that Google or eBay come off well in all this. Anyway, I don’t expect that eBay will stop using Google forever (the fact that they have very little leverage over Google undoubtedly drives them crazy). At the same time, there is a certain unfortunate petulance at the soul of eBay and if anything about this episode is harmful to that company, it’s the fact that its petulant nature is being exposed. Arbitrarily zapping partners like this, even big scary ones, is not a terrific way to run a platform.

A couple other points in the eBay/Google battle that nobody seems to have brought up: 1) eBay banned Google Checkout a while back on the flimsiest of pretenses, so creating the opportunity to take its case directly to eBay’s sellers would seem like a reasonable thing for Google to do; 2) there is ample precedent for this — those of us whose attention spans are longer than two weeks recall that elbowing in to the eBay Live conference was one of the tactics that PayPal used five years ago when it was penetrating the eBay marketplace. The outcome of that tactic was well-known (eBay was compelled to write PayPal a nine-figure check after its home-grown payment processing business failed to catch on). I doubt this is the outcome that Google is going for here, so it begs the question — why is Google even in the payment-processing business and how could their strategy be so tone-deaf to the reactions of the incumbent in this space?