It's no secret that part of Google's plan for world domination is to replace eBay, which involves selling products via Google Base and paying for them using Google Checkout. However, Google isn't yet powerful enough to launch the expected blitzkrieg, so the two companies maintain friendly relations under what's been compared to the Nazi-Soviet Non-Aggression Pact signed by Von Ribbentrop for Germany and Stalin.
Basically, the Google-eBay deal means eBay buys lots of ads on Google while Google supplies text-ads on eBay. So if you type something into Google, eg nukes, then you'll probably get an ad that recommends looking for a supplier on eBay.
But relations strained at the latest eBay sellers convention in Boston. As The New York Times reports, Google
decided it would be a good idea to invite those sellers to its own party. Not just any party, either, but one to promote Google Checkout, a payment system that competes with the eBay-owned PayPal and which eBay has banned from its auctions.
"Let Freedom Ring," read the invitation on an official Google blog. And in classic Google style, it promised "free food, free drinks, free live music -- even free massages."
Of course, this is an idea straight out of the Microsoft playbook. (Have you guys hired just too many people from Redmond?)
eBay promptly cancelled its advertising on Google, hitting the search engine exactly where it hurts: in the wallet. It backed down. As the NYT story says:
Google rescinded the invitation to eBay sellers and canceled the party. "EBay Live attendees have plenty of activities to keep them busy this week in Boston, and we did not want to detract from that activity," the Google blog read. "After speaking with officials at eBay, we at Google agreed that it was better for us not to feature this event during the eBay Live conference."
A Google spokesman declined to comment further.
So peace has been restored, but who knows how long it will last? There are plenty of eBay sellers who don't like things eBay is doing, and PayPal is an expensive way to pay for things. It's a market that could do with more competition.
However, the force is clearly with Google. It already has a monopoly market share of search and is busy locking users in with Gmail, Calendar, Google Apps, Gtalk and other applications that will mean most people will rarely go anywhere else. And having a deep, intimate knowledge of everything its users have searched for, Google will be perfectly placed to pitch them whatever products they need. How is anyone going to fight that?
