Multi-Million Dollar Feud Between EBay and PayPal
Google is trying to grow market share for its new online payment system, Google Checkout. eBay, however, only allows users of its auction website to accept online payments through its own partner, PayPal. This has frustrated customers, many of whom have had poor experiences with PayPal and put the two internet giants at odds with one another.
Google planned to protest eBay’s payment policies by holding a Let Freedom Ring party to pressure the auction magnate into giving their customers the choice of which payment system to use. The party would be held at the same time and in the same city as the eBay Live Annual Seller’s Conference, and could therefore attract a number of irate eBay users. “We’ll use the same spot where revolutionaries launched the Boston Tea Party to celebrate freedom with free food, free drinks, free live music — even free massages,” Google trumpeted.
EBay wasn’t about to take a slight like that sitting down. They responded by pulling all of their AdWords advertisements from Google’s system. Google immediately realized that the party was going too far and cancelled it.
Despite the party's cancellation, eBay has not restored its AdWords advertisements, which are estimated to be worth more than $200 million to Google, about 2% of the search engine giant’s annual earnings. eBay ranks well in Google’s natural results, so they may not have to go back to paying for their advertisements at all. If eBay drops AdWords ads, Google’s profits could take a big hit.
This entry was submitted by Charlie Jensen. Charlie is also one of the main writers on Future email and has been quoted often on the topic of accent.