How did all this get started? Let’s have a look.
The whole war has to do with competition between Paypal and Google Checkout. Paypal is an online money sending website, which is owned by eBay. They used to be independent, but eBay bought them a few years ago. Paypal is very profitable, and of course, eBay wants to keep it that way. Over the years, the primary use of Paypal has been for eBay buyers to pay for the items they bought from eBay sellers (even before eBay bought Paypal). In the last two years, Google has opened their own web payment service called Google Checkout. Google wants for eBay customers to be able to use Google Checkout to make their payments to eBay sellers. Currently, eBay doesn’t allow this, though. Google Checkout is left out in the cold when it comes to eBay sales.
Last week, eBay was holding it’s an annual event, eBay Live, which is a conference primarily for eBay Power Sellers. I used to be an eBay Power Seller, but I never attended eBay Live. The conference was being held in Boston. Google decided to see if they could get eBay to loosen up on Google Checkout by holding an “anti-eBay” party in Boston during the eBay Live event. The whole thing was to be kind of a protest against eBay for not allowing the use of Google Checkout.
There is only one problem that Google did not consider. eBay is a tens of millions of dollars with Google every year for keyword advertising through Google’s AdWords program! Well, when Google announced their Boston party against eBay, eBay decided to cut off it’s Google advertising. In an instant, Google was out tens of millions of dollars! Well, Google canceled the party, but eBay elected to stand firm on its plans to cut off Google advertising.
How does this affect you?
Well, believe it or not, this could have a profound effect on you. If you are a blogger and you depend on Google Adsense to monetize your blog, you may end up earning less! You see, now that eBay has abandoned Google advertising (for now, anyway), other big advertisers are re-evaluating their ad spending with Google. Hey, if eBay can stop advertising with Google, maybe the others can continue their success without Google as well. You can bet that if enough advertisers abandon Google, the amount of money you earn will decrease. The price of the ad units will go down in an attempt to attract new advertisers or to lure back the old ones.
I think it’s too early to see how this will pan out. Maybe after a month, eBay will come back to Google after teaching them a little lesson. We’ll have to see how this pans out. It’s not good news for online entrepreneurs like you and me, though.