September 1, 2006
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Google will supply eBay with Web search advertising outside the United States, and the two will join forces on "click-to-call" ads that link online shoppers to customer service operators, the companies said on Monday.
By Reuters
EBay said that for international online text advertising it had agreed to rely exclusively on Google instead of existing partner Yahoo, which in May struck a parallel deal to handle all of eBay's U.S. ads.
The eBay contract is part of a string of deals this month for Google. It previously said it planned to begin testing an ad-supported Web video syndication system with Viacom's MTV Networks. It also struck a deal to supply ads to MySpace users and other Web properties of News Corp.
"This (latest deal with eBay) in fact is the most important of these areas," Google Chief Executive Eric Schmidt said in a phone interview.
"You can now see Google's strategy in each of these new markets," Schmidt said of MTV Web video, the MySpace community and eBay e-commerce partnerships. "These are very large businesses for us. I don't know what rate they will grow at."
Separately, on Sunday, Google said it was moving beyond search and advertising into the business software market, starting with Google Apps for Your Domain, a set of Web programs for e-mail, scheduling and communications. It plans to add additional programs later.
Financial terms for components of the deal involve revenue sharing, but the companies did not disclose specific details. EBay said it did not expect the Google agreement to have a material impact on its financial results in 2006 or 2007.
EBay increasingly depends on paid search advertising to drive bidders to its auctions and sales. Its new pacts seek to make it easier for buyers to search for items for sale on eBay, while being careful not to offend sellers with competing ads.
Through its deal with Yahoo, Whitman said eBay had already begun testing ads that appear when U.S. customers fail to locate what they want on an eBay auction search.
The Google pact expands this to international sites.
If and when eBay sellers become more comfortable seeing ads alongside their listings, eBay plans to expand the number of pages where Yahoo or Google ads may appear, she said.
Phoning Web Customer Service
The companies said they will jointly offer "click-to-call" advertising using the respective instant message and Web phone-calling services of the two companies--eBay's globally popular Skype and Google's own nascent Google Talk service.
Click-to-call is where advertising merges into e-commerce. It allows potential buyers to click on Web-phone ad links and talk directly to sellers or their representatives.
The technique is seen as a promising way to reach merchants or advertisers who may not have a Web site, or who rely on Yellow Pages telephone directories to find possible customers.
"The vast majority of businesses still serve customers via the phone," eBay Chief Executive Meg Whitman said in a joint interview with Google's CEO. "This is the online equivalent."
"Google and eBay are uniquely positioned to make this market a reality," she added.
EBay is the world's dominant provider of online auctions. It has also signed up more than 100 million users worldwide for its Skype message and Web phone-calling service. Google has a leading position in Web search and associated ad technologies.
EBay said it would soon offer Skype users the option to download the Google Toolbar, which has quick links to Google services, especially Web search. The two will explore making Skype and Google Talk work together for text chats and to help make users aware when users of the other service are online.
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