As we announced in yesterday's newsletter, Google has introduced a new shopping search engine that will allow shoppers to find items easily across many retail Web sites. The service, called Froogle (http://froogle.google.com) "crawls" Web sites looking for items, and also allows merchants to supply a data feed directly to the Froogle service. Froogle will also include items from internet storefronts, such as TIAS.com, Yahoo! Stores and AuctionWatch.

"AuctionWatch is dedicated to helping small businesses succeed," said Larry Jordan, AuctionWatch's Vice President of Marketing. "We think this is going to be a great tool for sellers to get their items in front of potential customers."

eBay spokesperson Chris Donlay explained that eBay items would not be able to be picked up by Google because items are in a dynamic database. Rather than give Google a data feed, Donlay explained that eBay allows Google to include a link to the same search on eBay. (This did not seem to be working optimally when we conducted searches on Thursday, however.)

eBay also has a presence on Froogle in two other ways, Donlay said. eBay will show up on the right side of Froogle search results pages under "Sponsor Links." There is also a box underneath Froogle search results that says, "Try your search on other sites," listing nine sites, including eBay and Amazon.

Although America Online (AOL) is eBay's exclusive advertising sales representative, this relationship has deteriorated in recent years. eBay restructured its marketing agreement with AOL Time Warner in May, giving itself the option of not renewing in 2003 and 2004. The Wall Street Journal reported that AOL is planning a fixed-priced marketplace of its own.

eBay is likely getting a better return on Google (or at least more measureable return), and Donlay said eBay is one of Google's largest advertisers. With AOL using Google's search technology (and therefore eBay showing up under "Sponsor Links" on AOL Search), eBay may not miss AOL when the looming divorce becomes final.

So how will Google market the Froogle service, and how will they generate revenue from the service? Google would not elaborate. "Froogle is in Beta, and we are focusing on improving the quality of Froogle," said Eileen Rodriquez, a spokesperson for Google.

Merchants who want to be included in the Froogle search results should go to the "Info for Merchants" page at http://froogle.google.com/froogle/merchants.html.

"Ideally, we'd like to include all merchants," Rodriguez said.

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Chris Sherman, Associate Editor of Search Engine Watch, closely follows Google and wrote an excellent explanation of its new Froogle service at http://searchenginewatch.com/searchday/02/sd1212-froogle.html.