Wisdom of EBay's anti-Google move debated

Industry experts are split on the wisdom of the alliance eBay is reportedly seeking to form with Microsoft or Yahoo to combat Google.

EBay's top executives are alarmed at Google's recent launch of a product-listings service with an online payment system, which they view as a potentially dangerous threat to their company's core business, according to a Wall Street Journal story published Friday.

The Google Base service, introduced in test form in November 2005, lets users feed content to the company's search engine index, including items for sale. Google added an online payment system to Base in February of this year.

As a result, according to the Journal, eBay is discussing ways to establish stronger ties with Microsoft or Yahoo, both of which compete with Google in the search engine space and in the broader Web portal market.

Analysts disagree on whether eBay's reported reaction to Google Base is warranted.

"EBay is exposed. A lot of people are getting to the eBay properties through search engines, and Google is the leading one. All Google would have to do is intercept at the front end those people who are searching for things to purchase and redirect them to Google properties," said Rob Enderle from Enderle Group.

With Base, Google is clearly positioning itself as an eBay-like marketplace, a strategy that meshes well with Google's goal of linking users with information, in this case about products, Enderle said.

Others don't feel Google Base significantly threatens eBay's marketplace and PayPal online payment unit, and say that challenging eBay is difficult and costly, even for Google.

"You need a critical mass of people for that type of eBay marketplace to work, and there are considerable barriers to enter eBay's core business," said Philip Remek, a financial analyst with Guzman & Co.

Google is probably very aware that such a herculean effort could distract it from its core search business, where competition remains fierce, Remek said.

Google executives have denied in the past that Google Base is intended to compete head-to-head against eBay in marketplace listings and online payments.

Meanwhile, an eBay spokesman declined to comment on the Journal store but said eBay is constantly communicating with Yahoo, Microsoft and Google, because it spends millions of dollars advertising on their networks and because their search engines drive traffic to its marketplace.

Another analyst cautioned against reading too much into the reported discussions. "Companies talk all the time, even about mergers that never happen, and word about most of those discussions never gets out," said Joe Wilcox, a Jupiter Research analyst. "Just because this one leaked out doesn't indicate the earnestness of the discussion."

Should eBay team up with Microsoft or Yahoo, it should ensure the deal is for the long term and that the partner doesn't plan to launch its own eBay-like service later, Enderle said. "It's pretty clear both Microsoft and Yahoo are also looking to this [online marketplace] space," he said.

Some reported scenarios being discussed include eBay opening up its markeplace pages to third-party ads, which would be attractive for Microsoft and Yahoo, and would yield ad commissions for eBay.

The Journal also reports there have been talks about eBay gaining special access to either search engine, and integrating its PayPal online payment system and its Skype VOIP (voice over Internet Protocol) service with Yahoo or Microsoft systems and software.

Meanwhile, talks are preliminary and could fall apart, and Google has also sought to appease eBay by offering a closer relationship, the Journal reported.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Juan Carlos Perez

IDG News Service
Show Comments

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?