Animosity Escalates as eBay Pulls Google AdWords, Reallocates Dollars

Search Google for “Beanie Babies,” and you won’t see any. Same goes for “baseball cards” and “emo vintage T-shirts.” While users would typically see a sponsored link for eBay in Google’s results for such searches, the auction site officially has pulled those ubiquitous AdWords ads directed to U.S. users.

The reason most observers are citing: Google’s plans to host a protest shindig tomorrow in response to eBay’s refusal to accept Google Checkout for eBay transactions. EBay, however, chalks up its decision to pull ad dollars from Google to “traffic optimization.” Google Checkout, of course, is a main rival of the dominant online transaction firm, eBay-owned PayPal.

According to eBay spokesperson Hani Durzy, eBay pulled the AdWords ads a few days ago as part of its perpetual ad optimization testing, and has since moved the dollars once allocated to Google to “a number of different marketing channels.” Those other channels include Google rival Yahoo; ebay happens to have close ties with the company, which serves all display advertising on eBay. Durzy said eBay does not provide a breakdown of its online advertising budget publicly.

The tech blogosphere is bubbling over the decision, referring to the recently-intensified scuffle as nasty, dirty, and downright “medieval.” Most believe news of a protest which was to be hosted by Google smack dab in the middle of eBay’s conference prompted eBay’s swift counterattack. The anti-eBay gathering, dubbed “Let Freedom Ring,” was to be held in Boston, where the annual eBay Live conference is set to start tomorrow.

“We’re disappointed that Google would attempt to engage in an event like that designed to detract from our eBay Live attendees’ ability to learn more about how to build their businesses,” Durzy told ClickZ News.

The protest is now kaput as of today, according to the official Google Checkout blog. “eBay Live attendees have plenty of activities to keep them busy this week in Boston, and we did not want to detract from that activity. After speaking with officials at eBay, we at Google agreed that it was better for us not to feature this event during the eBay Live conference,” noted the post.

“It’s reassuring…that Google recognizes that their action was inappropriate,” said Durzy.

EBay’s ad optimization decision doesn’t sit well with John Lawson, owner of 3rdPowerOutlet.com, an online “urban wear” retailer based out of Atlanta. “I personally am very, very ticked off,” said the eBay seller. “I can’t believe eBay is going to jeopardize us sellers just to make a point with Google about something that is already an issue with us.”

Lawson, under the auspices of The Internet Merchants Association, launched an online petition in February addressed to “Mr. Bill Cobb [eBay President, North America] and eBay Leadership” in protest of eBay’s refusal to accept the Google Checkout service. “WE, the eBay community are hereby petitioning eBay leadership to completely lift the ban of Google Checkout immediately. Google Checkout makes online shopping quick and easy and the buyer information is PROTECTED,” reads the petition, signed by nearly 400 people as of 4:30 pm Eastern today. The IMA is a non-profit trade association.

“Our goal is to actually increase and optimize the traffic [to eBay],” said Durzy. “It doesn’t make any sense that we would ever do anything to jeopardize the business of eBay sellers.”

There’s no telling when or if eBay will reinstate its U.S.-aimed Google ads. According to Durzy the company is “going to see how it goes.”