Google, eBay form advertising alliance - East Valley Tribune: Business

Google, eBay form advertising alliance

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Posted: Monday, August 28, 2006 6:58 am | Updated: 2:02 pm, Fri Oct 7, 2011.

SAN FRANCISCO - In a deal between two of the Internet's most prominent properties, Google will begin selling advertising for Web auctioneer eBay outside the United States and help buyers quickly ring an online merchant to do business.

The arrangement announced Monday promises to introduce "click-to-call" Web site technology to a broader audience and potentially speed its adoption as a means of more quickly connecting online consumers with advertisers. It will allow potential buyers to call eBay merchants or Google advertisers by clicking a link on a Web page.

"We have a chance to create a whole new way for buyers and sellers to connect online and to create what we hope will be a significant revenue stream for both eBay and Google," eBay Inc. Chief Executive Meg Whitman said in an interview Sunday night.

Google Inc. CEO Eric Schmidt said the agreement with eBay is "likely to go on for many years," but he would not disclose the terms of the deal or what it might mean for the Mountain View-based search engine's bottom line. Whitman said eBay does not expect the partnership to affect its financial performance this year or next.

Under the partnership, Google will become the exclusive provider of text advertising on eBay outside the United States. In May, eBay announced a deal with the No. 2 Internet search engine, Yahoo Inc., to serve all its domestic advertising.

Whitman said eBay decided to give Google's advertisers access to its international auction sites after choosing Yahoo for its domestic advertising because of the competing Internet search engines' respective strengths and how they mesh with eBay's assets.

The deal represents the latest advertising win for Google. Earlier this month, News Corp. agreed to make Google the exclusive search partner for most of its sites, including the popular online hangout MySpace.com. Late last year, Time Warner Inc.'s AOL agreed to sell a 5 percent stake to Google in a $1 billion deal that extends and deepens the ties between the two.

The click-to-call component of the new alliance calls for the two Silicon Valley companies to work together on developing a service that lets Web surfers place telephone calls through their computers or handheld devices when they click on a link in an Internet ad.

Its advocates, including some merchants who have tried it, say customers who call are ready to buy and aren't just browsing the Internet; thus, search engines can charge more - $2 to $10 or even more per call, compared with less than $1 per click with traditional search ads.

Google already has been testing a program in which users click on a phone icon and type their number into a box. Google then dials the user, who hears ringing until the merchant answers.

Schmidt and Whitman said they would begin testing some of their joint services early next year.

Last year, eBay bought the Internet phone service Skype. Google has its own messaging and Internet-based telephone service, Google Talk. Both services will be used in the partnership, though details were not disclosed. EBay does plan to rely on Google's international presence to build a worldwide market for Skype.

Promoting "click-to-call" advertising was also part of the deal eBay announced with Yahoo in May. Yahoo also has been testing the concept.

San Jose-based Ebay also owns PayPal, an online payment service, and when the company joined advertising forces with Yahoo, PayPal became the preferred payment provider for purchases made on Yahoo.

Although eBay already was one of Google's biggest advertisers, the search engine launched a rival online payment service to PayPal in June. Schmidt said the overlapping services and partnerships are all part of industry's effort to respond to tech-saavy shoppers who want service in a hurry.

"This is all about speed," he said. "The moment somebody wants to buy something, we want that advertiser to be able to sell it, hawk it or do whatever they want with it."

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