eBay has pulled out of Google's AdWords scheme because the search giant held an event on the same evening as eBay's annual merchant's conference.
Ian Maude, an analyst from Enders Analysis, claims that Google's plan to host a party on the same night was nothing more than a marketing stunt
, but unfortunately it has come back to bite it in the proverbial backside.
You see, Google wanted to attract attention away from PayPal which is competitor to its own online payment scheme, Google Checkout. PayPal is owned by the online auction portal and eBay obviously saw straight through the search giant's plan.
A spokesperson for eBay said that the company was disappointed with Google's plans to host a rival gig; "We don't view that kind of activity as an appropriate activity for one partner to do to another."
The auction site spends around $25m USD a year on Google AdWords, which potentially makes it Google's largest single AdWords client. But Google Checkout is currently banned from the auction site, so it could be part of a wider effort to get Checkout onto eBay's whitelist.
Strangely though, Google decided to cancel its rival function the day before it was scheduled to happen, stating that "after speaking with officials at eBay, we at Google agreed it was better for us not to feature this event during the eBay Live conference."
Maude believes that eBay will advertise with Google again in the future, once negotiations between the two companies have been completed. This makes sense, especially given the fact that Google's share of the Internet search market is around 50 percent in the US and 80 percent in Europe.
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