Google, eBay form advertising alliance

01 Sep 2006

Google and eBay announced an advertising partnership that aims to put buyers in touch with a wider variety of sellers, such as the neighborhood exterminator, math tutor or roofer.

Under the arrangement, Google would provide search results whenever an eBay member typed in a search term that failed to find any matches on eBay's vast auction site.

Although eBay lists millions of physical, shippable goods, such as antique airplanes and used cloth diapers, the company has long struggled to sign up service providers, people who sell their labor or intellect, not their physical wares.

Nearly two years ago, eBay purchased a 25% stake in Craigslist to study how the world's most popular online auction company could learn from the bare-bones community site, which has a thriving services category and sellers ranging from professional escorts to freelance software engineers.

But eBay hasn't been able to attract similar numbers of professionals to its site. For example, eBay contains more than 6,500 items related to scuba diving. But a search for 'scuba diving lessons' resulted in zero matches.

The new deal would change that. Instead of nothing, eBay visitors would get text advertisements from Google. Although eBay risks sending visitors elsewhere, it ensures consumers that by going to eBay for nearly anything, they'd find a seller somewhere.

Financial terms of the deal were not released, but both companies acknowledge that it includes revenue sharing, so eBay would also likely get a fee for referring people to other sites.

The service will be rolled out in early 2007 to consumers outside of the US.

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