eBay vs. the Google Juggernaut

Google's growing dominance leads to a search for partners

By all reckonings, eBay is the worlds largest online marketplace and has been for a number of years now. There do exist other web properties, however, which are larger overall—the foremost of which is Google. The juggernaut of the web, Google has toeholds in online industries aplenty beyond the simple searching and indexing that made it famous.

Over the years, Google's search results and network of ad carriers have been prime real estate for advertisers to sell their wares, and eBay has been no different in this regard.

In fact, the lion's share of eBay's $400-million-plus of online advertising has gone to Google. According to a Wall Street Journal piece published Friday, however, eBay may be having second thoughts about its close relationship to the search giant.

Multiple sources report that eBay is currently seeking strategic partnership(s)—most likely with Microsoft or Yahoo!—as a butress against competition from Google, in hopes of fending off the threat posed by its continued and amazing expansion. MSN and Yahoo! both have firsthand experience in learning to play second fiddle to an upstart Google (witness Steve Ballmer's famous tirades against Google), and eBay is now apparently starting to feel the same pinch.

eBay sees Google Base, launched last year, as a strong competitor to both its core auction business and the major stake it took in craigslist in 2004. Furthermore, Google Base has become the testing platform for a new Google online payments system that works very much like eBay's PayPal.

To add pressure on yet one more front, the launch of Google Talk competes directly with the Skype communications service that eBay acquired in 2005.

It looks as though eBay's has found itself a serious case of buyers' remorse after pouring millions of advertising revenue into the coffers of a company that increasingly acts like a direct competitor.

Time will tell just how alliances with Microsoft or Yahoo! might look, or what effect they might have on the larger ecommerce ecosystem.