eBay and Google are beginning to work together as part of an online advertising agreement the two entered into last August. The multi-year agreement makes Google the exclusive text-based advertising service for eBay outside the United States that also involves "click-to-call" advertising functionality.

Visitors to some non-US eBay sites, including in Canada and the UK, will start to see Google text ads on "null search results," which occur when no relevant eBay listings appear in response to a search query.

The move follows a similar deal between eBay and Yahoo announced last May that applies exclusively to eBay.com, where Yahoo ads have been appearing since July (http://www.auctionbytes.com/cab/abn/y06/m07/i19/s01). In addition to displaying ads for null search results, eBay has also been testing text advertising for complementary results, and Yahoo began serving up graphic ads on eBay on a selected basis in the fourth quarter.

When the eBay-Yahoo agreement was first announced last Spring, an eBay spokesperson said the increased traffic and exposure eBay would get on Yahoo pages through the partnership would benefit eBay sellers tremendously. But sellers on eBay remain concerned that the ads would compete with their own listings.

In December, a blogger located in the UK noticed ads for eBay's comparison shopping service had begun appearing on eBay UK search results. The TameBay blogger complained that eBay bans sellers from linking to their own ecommerce sites, but the Shopping.com ads were doing just that. ""Inappropriate links undermine the trust and legitimacy of eBay’s marketplace" is a direct quote from eBay's own policies. It has always been a given that links that permit off site sales were forbidden, but that's all changed," she wrote (http://www.tamebay.com/2006/12/inappropriate-links-undermine-trust-and.html).

eBay said it had been testing ads for Shopping.com on several sites including Germany, UK, France, Austria and Australia. "Preliminary results are very encouraging and we will likely extend this test over the course of February."

While eBay is working with Google, it is also finding itself competing with it as the search-giant extends into payment processing and ecommerce (http://www.auctionbytes.com/cab/abn/y07/m01/i22/s01).

eBay CEO Meg Whitman put her own spin on the competition during Wednesday's investor conference call, when she said of Google Checkout's effect on PayPal: when there's a new entrant in an industry, "the market leader is typically the beneficiary," and eBay has "disproportionately benefited from news in this category."

eBay Canada Announcement:
http://www2.ebay.com/aw/ca/200701251725142.html

eBay UK Announcement:
http://www2.ebay.com/aw/uk/200701250905062.html

Link to "eBay Partners with Google for Click to Call Ad Program," 8/28/06
http://www.auctionbytes.com/cab/abn/y06/m08/i28/s00