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More problems for eBay sellers. eBay and Google agree to cross platform advertising.

August 28th, 2006 by Skip McGrath

ebay goes to great lenghts to keep sellers on the eBay platform, now they are going to drive your buyers to Google advertisers.

Following eBay’s agreement with Yahoo on PayPal and pay per click advertising, eBay and Google today announced a multi-year agreement involving text-based advertising and “click-to-call” (Read Skype) advertising functionality.

First eBay made a deal with Yahoo that would help PayPal by integrating it with Yahoo. In exchange, Yahoo will get to put its pay-per-click (PPC) advertising results on eBay’s search results pages in the US.

According to today’s press release, Google will become the exclusive text-based advertising provider for eBay outside the United States. “In addition, eBay and Google plan to integrate and launch “click-to-call” advertising functionality that leverages both Skype and Google Talk globally in each company’s respective shopping and search platforms. The companies said “the financial terms for certain components of the deal involve revenue sharing.”

Basically this means that ebay sold US sellers out to Yahoo in exchange for increased PayPal revenue and now they are selling out overseas eBay sellers in exchange for Skype revenue.

If I understand today’s release correctly, Google just figured out how to get their pay per click advertising to appear on eBay’s overseas platform. The money eBay spends on Google AdWords has always been a boon to eBay sellers. It brings millions of eyeballs to the site –and therefore to our listings. Now, the Google and Yahoo deals will result in driving buyers to our competitors off of eBay.

The Google/eBay agreement includes two main parts –neither of which will appeal to eBay sellers.

1. Search and Advertising on eBay Sites Outside the U.S.
Google will provide text-based advertising (Google AdWords text ads) on eBay outside the United States. The agreement provides Google advertisers access to eBay and exposes eBay buyers to sources for the products they are seeking off of eBay. What Brainiac at eBay agreed to this?

The press release is long on concept and short on details. If you read between the lines, I think this means that when a buyer performs a search on eBay (non-US sites) they will also get Google AdWords results across the top of the page in place of the text boxes you could formerly get from the eBay keywords program (cancelled last week by eBay). eBay sellers will not like this!

As a seller I have always opposed banners on eBay that advertise outside websites. I don’t really care if it’s UPS or Monster.com. eBay does everything it can to keep sellers from directing buyers to web sites off of eBay and then they do it themselves to generate advertising revenue at our expense. Now in addition to the banners, if someone is searching for something I am selling, it appears they will also get Yahoo sponsored results on eBay US and Google AdWords text ads (overseas) to websites selling the same product off of eBay.

By killing off the eBay keywords program and replacing it with Yahoo and Google, this means that where I could formerly buy a top-performing keyword on eBay for ten or fifteen cents, I will now have to pay up to a dollar a click or even more to get my text ad.

2. Click-to-Call Advertising

Since eBay acquired Skype they have stumbled around aimlessly for months trying to find a use for it that integrates with eBay’s service and functionality.

This agreement calls for eBay and Google to integrate and launch “click-to-call” advertising functionality within eBay’s U.S. and international marketplaces and Google’s search platform. The click-to-call capability will allow a user to click on a link or icon within a product or service advertisement to initiate an Internet voice call to participating eBay merchants or Google advertisers directly from either company’s respective sites, using Skype or Google Talk.

Great – now I have a choice: Do I want to answer dozens of phone calls a day? If I do, I will need to hire some help. If I don’t, people will be clicking on my competitors. Not cool, eBay! If you make me do this, the first thing I will tell people when they call, is to go to my website. If I am going to suffer this additional hassle and cost, I am not going to pay eBay final value fees to do it. This scheme may work for titanium power sellers with lots of employees but the internet is a 24/7/365 enterprise. What am I supposed to do, hire a call center in India to answer my calls while I’m asleep?

This deal will earn extra revenue for eBay but it comes at the expense of sellers.  What’s new?

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