eBay and Google Form Strategic Advertising Partnership

Strategic Insights -

eBay, an online marketplace, has signed a partnership with Google to sell advertising on its pages outside the United States. This alliance marks a significant move by eBay to counter Google's growing dominance in online advertising, particularly in international markets. The partnership coincides with eBay's efforts to increase its international advertising revenue, and Google's strength in every country outside the US made it an attractive partner.

Key Takeaways:

  • eBay and Google will partner to sell advertising on eBay's international pages, which will help eBay increase its international advertising revenue.
  • Google will provide eBay with its expertise in selling text advertisements, leveraging its strength in every country outside the US.
  • The partnership includes the development of a "click to call" advertising system, which will allow users to have a conversation with advertisers or product sellers directly.
  • eBay had previously explored a similar deal with Yahoo but found that partnering with Google made more sense due to its larger share of the worldwide search market.
  • The companies expect merchants to pay a fee, which will be split between eBay and Google, for each call received through the "click to call" system.
  • This partnership highlights eBay's efforts to adapt to changing market trends and maintain its competitiveness in the face of Google's growing expansion into online services.

Statistics:

  • Google is the leader in selling text advertisements on the Internet, dwarfing Yahoo, especially in Europe.
  • The "click to call" advertising system is expected to bring in revenue through call fees, which will be split between eBay and Google.
  • The partnership between eBay and Google will help eBay increase its international advertising revenue, which is a key area of focus for the company.
  • Google has a much larger share of the worldwide search market, making it a more attractive partner for eBay.

Sources:

  • "eBay plans to announce today that it has hired Google to sell advertising that will appear on many pages shown to users outside of the United States." [1]
  • The partnership between eBay and Google was seen as a way to counter the growing power of Google. [2]
  • Google is the leader in selling text advertisements on the Internet. [3]
  • Google Base lists products for sale; Google Checkout competes with eBay's PayPal; and Google Talk is an alternative to eBay's Skype online phone service. [4]
  • 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. [5]

[1] New York Times

[2] Wall Street Journal

[3] Advertising Age

[4] CNET

[5] The Washington Post