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Google Cancels 'Freedom' Party To Appease eBay

The online auction site reportedly canceled its search ad purchases in response to Google's planned promotion of Google Checkout at an eBay event.
In March in the United States, according to Internet metrics company comScore, eBay was the top-paid search advertiser on Google, with 188 million sponsored link exposures. The contretemps between Google and eBay may herald an escalation in hostilities, or at least a surge in stepped-on toes. Despite a multiyear agreement signed by the two companies last year under which Google became the exclusive text-based advertising provider for eBay outside the United States, Google's and eBay's interests increasingly overlap.

EBay last year decided to enter the online ad market with its AdContext program, which lets eBay Affiliates promote auctions on other sites and collect a sales commission. It's not precisely the same as Google's AdSense program, but it's pretty close.

Google and eBay have each been nurturing developer programs. These aren't necessarily directly competitive since developers can participate in both. But the time-consuming nature of software development suggests that programmers will favor one platform over another.

EBay's Skype telephony service isn't yet threatened by Google Talk, but it could be. Given enough promotion, better support on mobile devices, and click-to-call integration with Google search results, Google Talk could obviate the need for a stand-alone voice client like Skype.

And of course, Google has been promoting Google Checkout, Google Product Search, and e-commerce in general as a way to diversify its revenue stream beyond ad trafficking. EBay executives are clearly paying close attention.