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Google moves to smooth over spat with eBay

Google cancels provocative eBay Live party

The spat is yet another sign of what many consider a significant deterioration of relations between the two internet giants in recent years, as Google has become a partial competitor to eBay.

Earlier yesterday, Durzy said the decision to pull out the ads wasn't related to the party and characterised it as an ordinary experiment by eBay, similar to others the company constantly does to determine the best allocation of its advertising and marketing budget.

But there is nothing ordinary about eBay and Google, and the pullout is likely to have significant repercussions for both companies while it lasts: eBay is the largest paid search advertiser in the US and Google is the country's largest paid search ad network.

In March, eBay ranked first in the US among paid search advertisers with 802 million sponsored link exposures, or 4.1 percent of the total, according to comScore Networks. That doesn't even take into account eBay's comparison shopping engine, Shopping.com, which ranked third on that list with 357 million sponsored link exposures, or 1.8 percent of the total.

Meanwhile, Google topped the list of search engine referrers, handling 57.3 percent of all paid search ad clickthroughs, comScore said. Yahoo took a distant second place with 26.1 percent of clickthroughs.

More: Google and Intel back $5.5bn green group

eBay desktop application launched

In May of last year, eBay and Yahoo struck a wide-ranging partnership that, among other things, made Yahoo the exclusive provider of search and display ads within US eBay sites.

Although Google performs a similar function for eBay sites outside of the US, the eBay-Yahoo tie up was seen as a defensive move by eBay and Yahoo against Google.

Google hasn't replied to requests seeking comment.


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