The love-hate relationship between eBay (Nasdaq: EBAY) and Google (Nasdaq: GOOG) has turned acrimonious again. The latest spat is a simultaneous slap that finds eBay pulling its stateside contextual marketing spots from Google's paid search program just as Google made plans to crash tonight's launch of eBay Live with a media-magnetizing protest.
These emotional moves aren't petty. This could be the end of what was once a beautiful relationship, with Dear John letters scribbled in blood, tears, and grain alcohol.
Each move deserves a little color. Let's whip out the Crayola box before Mr. and Mrs. Smith succeed in blowing each other to bits. Stick with me here, because there may be a happy ending after all.
No more pink dragons on eBay
As the most prominent advertiser on Google's niche-defining AdWords platform, eBay has been winning cheap leads from Google search queries for years. Google regulars know the eBay ads that seem to come back as sponsored results, often as the lone ad for eclectic searches for things like ox, pink dragons, and even -- yikes -- dead cats.
The ads would send clickers to eBay's vast marketplace. Well, those ads are, for the most part, gone now. Both companies are likely to suffer if the absence continues. Google will obviously miss out on the breadth of ad inventory. If you have ever wanted to peddle pink dragons or oxen, you won't have a lot of competition these days in bidding up keywords.
eBay is also likely to suffer. It's not a charity. It wouldn't have been advertising through Google for so long if it wasn't cost-effective. With stateside listings starting to wane, eBay is picking a lousy time to make a statement.
eBay Live and let die
Google launched its online financial payment platform -- Checkout -- last year. It stressed that it was not trying to introduce a PayPal killer, but it wasn't long before Google was aiming its crosshairs right at eBay's popular pay service. Google began to seduce merchants by undercutting PayPal's transactional fees, while also trying to lure consumers with cash bonuses.
eBay's loudest response was banning the use of Google Checkout at the end of any completed auction on its site. It pegged the virtual swapper of legal tender as unacceptable because it was unproven. However, now that Checkout has been around and widely used over the past year, eBay's out of excuses.
This brings us to tonight's originally planned protest from Google, deliberately timed to coincide with eBay's annual love-fest, where the company and eBayholics congregate to share tips, opportunities, and back pats. The Google Checkout Freedom Party is inviting online sellers in Boston for eBay Live to come on over, stealing eBay's thunder by offering free eats, booze, music, and even massages (a Google HQ staple, by the way). Google is trying to cash in on the rebellious spirit of the Boston Tea Party, but it's more like the Boston Peeve Party.
Why can't we be e-friends?
Bridges are useless if they're burned. Sure, eBay is threatened. Checkout is a PayPal clone. Google Base can be massaged into a thrifty peddler's version of eBay auction listings. eBay's Shopping.com and Google Products (formerly known as Froogle) are well-trafficked comparison shopping sites. eBay has the upper hand in those battles, but why must it be so awkward to sleep with the enemy?
The alternative isn't pretty. Bickering because of the overlap doesn't weaken the other party. It only makes both warring factions dumber for not being able to capitalize on the inherent advantages of its former booty call.
I know, Google and eBay would never be able to pull off a public union. If the Feds are raising eyebrows over Google's $3.1 billion purchase of DoubleClick, they would fall over backwards if Google and eBay ever made it to the acquisitive altar.
That's okay. They can still shack up, partnering the way they used to -- as friends with benefits. Just as Microsoft (Nasdaq: MSFT) and Yahoo! (Nasdaq: YHOO) seem to be fully aware of having to work together to stand a chance against Google, eBay is better off working with Google than against it.
Tonight's scene in Boston is all wrong. Google should be at an eBay Live booth, pitching Checkout. I should be filling my ox needs through eBay auction marketplace ads on Google's search engine result pages.
I did promise a happy ending. Last night, after clicking Google's link to RSVP for the bashing bash, the following notice came up:
Thank you for your interest in attending. This event will no longer take place as originally planned. We apologize for any inconvenience.
Giving up free grub and rubdowns is a small price to pay for the harmony that both companies need. The Boston Tea Party is now the Boston Team Party.
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Longtime Fool contributor Rick Munarriz thinks that feeling blue is wrong in a Red Sox city. He does not own shares in any of the companies in this story. He is also part of the
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