One more giant advertising partnership was announced today, and this could be one of the biggest yet. EBay has announced that Google will serve up text ads on its sites outside the US. The sum was undisclosed, but must be gargantuan. Half of eBay buyers are reported to live outside the US and the international part of the business is growing twice as fast as eBay in the US. EBay said that the deal wouldn’t substantially impact their bottom line in either of the next two years, so Google payments may depend on conditions that will be evaluated after that time. Yahoo! announced an agreement to provide ads on the US site in May.
EBay’s traffic trails closely behind MySpace’s, but serves an audience intending to spend money and with a more clear, stable relationship than the fickle teenage cool factor driving MySpace. MySpace got a guaranteed $900 million in its deal with Google.
This could have been a major coup for Yahoo! or Microsoft, but as it stands it’s unsurprising that Google landed the deal. Google is willing to go to great lengths to land big advertising deals lately, such as to reportedly giving 90% or more of total revenue to select partners like AOL and Ask and guaranteeing nearly $1 billion to Myspace. Google’s advertising formula is also believed to be the most lucrative, as it takes customer clicks into account. Yahoo! is rumored to be working on similar functionality but lost the chance to extend it’s US advertising agreement with eBay. The Google agreement makes deals like Microsoft’s with Facebook last week look puny, though that deal is said to have required very little negotiation.
When eBay formed an agreement with Yahoo! in May to serve the advertisements on the domestic site, analysts said that both companies were running scared from Google, that one company should buy part of the other and that the partnership was expected to expand over time. In that deal, Yahoo! agree to heavily promote PayPal throughout Yahoo! properties. In this week’s deal with Google, it looks like Google doing the pushing – eBay paid a lot of money for Skype but will integrate the tiny Google Talk as well into the site.
Yahoo! was supposed to integrate Skype as a part of the May deal, but eBay’s Meg Whitman told the New York Times that working with Google on VOIP made more sense. It probably made sense because Google demanded it and had the money to back up their demands. EBay spent more than two billion dollars for Skype but has failed to integrate it beyond a simple click to call inside auctions – something Google Talk could probably have done as part of a deal like this for far less money than the acquisition.
As it is both services will be available for click to call, Skype will offer the Google Toolbar for download with a Skype button and the companies say they are exploring interoperability between the two systems, at least for IM and presence.