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If you’ve ever spent the time to look at AdSense ads on Google’s left navigation bar, you probably noticed that a few of the ads were for eBay. This is because eBay is one of Google’s largest advertising partners. Virtually any key phrase you search for on Google will yield at least one ad published by eBay, even if you have to move through several pages of ads to find it. And this is how it has been since the inception of Google’s AdSense program. Until this latest piece of SE News surfaced, there was probably no reason to believe that things would chance. But now things are different.
Google’s creeping encroachment into everything on the Internet, including auctions, browser toolbars, news, email, and advertising has eBay worried. While Google does not overtly claim to seek Ebay’s market share-and has actually repeatedly affirmed their partnership in public emails in response to this breaking SE News — eBay is reluctant to accept this and simply go about business, knowing that Google has the leverage, the technology, and the cult following to conquer virtually any Internet market, including auctions and payment services, both of which they have already begun to cultivate.
Rather than simply withdrawing ads funding the Internet giant, eBay has taken a more subtle path: they have decided to form a revenue-sharing partnership with another Internet giant, Yahoo, the most popular portal currently on the web. While both eBay and Yahoo offer auctions, click-to-talk Internet phone services, and online payment services, the two massive oligopolies have decided to collaborate against Google, rather than duking it out in a four-way oligopolistic competition with Google, MSN, and each other.
In addition to sharing revenue for several projects, eBay and Yahoo have also decided to take on a number of joint venture projects, which they discussed in their joint SE News press release. One such project will be the development of a joint Ebay-Yahoo browser toolbar, which will include a collaborative click-to-talk phone service that will integrate both Yahoo and eBay technologies. This special click-to-talk technology will enable web browsers to interact with each other over the phone by simply clicking on an icon on their toolbars. Presumably, this toolbar will also feature auction and search tools.
eBay and Yahoo also announced plan to setup a joint venture for ad serving in their latest SE News press release. eBay used to feature a crude version of Google Adsense’s program to complement auctions and to allow sellers to advertise above general searches, but they will no longer serve ads in house after this agreement is finalized; they will turn that responsibility over to Yahoo, who recently developed a corollary go AdSense — Yahoo Publisher Network (YPN). With eBay switching in-house ad serving to YPN, it is only fair to speculate that they will also switch their contextual ads to YPN-or at least divert some of the funds that are currently being added to Google’s coffers. And that is exactly what stock holders did — they speculated, giving rise to Yahoo and eBay stock rallies and a complementary dip in Google’s share price.
To reciprocate, Yahoo has agreed to allow eBay to take over their auction payment services program and replace it with Paypal, the current largest method of online payment, which services more than 73 million account holders and allows users to pay with credit cards or from checking or savings accounts.
In addition to their Internet click-to-talk phone service collaboration, Yahoo and eBay also plan to combine resources to improve Yahoo’s YPN service, so that it can better compete with Adsense. With eBay as Yahoo’s potentially largest customer, eBay will be able to use staff economists and technicians, and coders to determine how Yahoo’s technology and ad-serving algorithm can be improved.
With this latest powerful punch of SE News, you might be left wondering what-if anything-Google plans to do. Will they simply stand by idly and watch one of their biggest competitors and one of their best financial allies join forces to forcefully wrench from them a larger piece of the Internet traffic pie? — Or will they react in typical Google fashion by simply out innovating everyone in the market?
There’s no definite answer quite yet, especially with eBay being sheepish about its plans to move advertising from Google to Yahoo, but insiders indicate that Google may be pairing up with computer manufacturing giant Dell to take on the new Yahoo-Ebay alliance and its old enemy, Microsoft. No matter what happens, it is clear that this latest piece of SE News — Yahoo and eBay joining forces is guaranteed to shake up the current Internet power structure; as a result, consumers and advertisers alike may end up benefiting significantly, as these high profit margin Internet firms scramble to out compete and out innovate each other.
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Mary Murtha
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Source by Mary Murtha
