I’m reeling from a 12 hour (yes, 12 hour) trip from Chicago to SF last night but this morning’s news must be at least noted, for now: Yahoo and eBay are hooking up, clearly a move against Google – eBay accounts for hundreds of millions of dollars in Google’s revenue. From what I can make out, however, this deal does not change eBay’s relationship with Google, rather, it marks Yahoo’s first major syndication win in years. From USA Today:
Under the deal, Yahoo will be exclusive third-party provider of all graphic ads throughout eBay’s auction site. Yahoo has also chosen EBay’s online payment system, PayPal, to allow its customers to pay for Yahoo Web services.
It’s tempting to say Google loses here, and while I am sure the company would love to have eBay’s site amongst its syndicated partners (like AOL and Ask), I am not surprised in the least that Yahoo won this round. The market tends to balance itself, and this is a major proof point.
I dont see this as a loss for Google – it is a missed opportunity.
Next up — who does Rupert Murdoch choose to fill his MySpace (and other network) search needs?
My money is on MSN but he may play a wild card and pull in an InfoSpace or LookSmart.
What say you John?
Why do you say eBay accounts for hundreds of millions of dollars of Google’s revenue? Is/Was eBay distributing AdSense? If you’re talking about eBay’s search marketing efforts on Google, to my knowledge there’s not a single ppc advertiser spending more than $50M/year on any one search engine.
@Chris, eBay’s search marketing efforts were quite aggressive, they used to sell everything “Used and New”, may be you can try Chris on Google to find an ebay ad “Chris Used and New..Find Here”(j.j/k)
I wonder if Ebay will continue to use Google ads to drive traffic TO ebay.com. In my experience Google ads perform and monetize better than Yahoo ads. If Ebay agrees, they may have chosen to drop Google ads for monetizing Ebay (especially if Yahoo has sweetened the rev mix to help minimize the revenue reduction impact) but are they also willing to settle for less traffic? We shall see. Currently, Ebay is all over Google. For fun, I just tried a random search for “pink bannanas”. Amazingly, the Ebay ad actually clicks through to something relevant which is a testamant to the amazing array of stuff sold there.
Maybe this will get Google to get in overdrive with Wallet or G Buy….
I really need a non Pay Pal account for online transactions
I did have an Beta invite a few months back but lost it somewhere 🙁
Also I think Google would benefit from having Services rendered as a payable solution and not just items
David
ps Did I say I thoroughly enjoyed “The Search”
Ebay can drop Google ads for monetizing their auction pages, but they or for that matter nobody else can even think of any alternative other than Google Adwords to drive traffic at present. I agree with Malcolm that Yahoo ads perform better but Yahoo traffic is a fraction of Google traffic..
Amit, Sorry to contradict you, but I said that in my experience Google ads peform better (drive more traffic) and monetize better (drive more revenue) than Yahoo ads. I bet Ebay’s position will be “I don’t like you but I can’t live without the traffic you send me” – and I’m sure Google will be happy to continue taking their money.
As in google’s words “No Evil”
Its a fair move and monopolising anything is not good at all!!
It’s really a loss for Microsoft. Yahoo has and will continue to be Google’s main competitor. Meanwhile, Microsoft needs these syndication deals to produce an ad network that’s not irrelevant in terms of reach. They aren’t getting it on their own site (their search market share keeps falling), and the deals they’ve been able to sign are modest at best (a9/amazon syndication).
Of course the bigger publishers provide more leveraged reach, but if you aggregate all the smaller publishers I bet it’s an interesting number. I suspect most smaller publishers would switch to Microsoft (or Yahoo) in an instance if they paid better than Google. In fact, one option for MSFT is to offer higher payments to publishers in return for fixed-period exclusives. The longer the exclusive, the richer the payment. Of course this would be tough to do without losing money – no one seems to be able to optimize ad revenues like Google so they typically start with a larger pie to share with publishers.
I wonder how Yahoo compares to Google for product-specific search term inventory? Serving relevant ads for the very specific terms people type into the Ebay search box is the key to making money here. Can Yahoo do that better than Google? If not, did Yahoo offer Ebay a bigger share of revenues? Or, did Ebay make more of an “Anybody but Google” decision here?
Meanwhile, Microsoft needs these syndication deals to produce an ad network that’s not irrelevant in terms of reach. Sohbet