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EBay 'Experimenting' With Google Ad Spend

If you're in the U.S., Google search advertising isn't going to help you "find it on eBay" today.

That's because eBay is "experimenting" with other methods to optimize traffic to its site, company spokesperson Hani Durzy told internetnews.com.

The move follows Google's recently canceled plans to host an event in Boston, the site of this year's eBay Live, to protest a clause in eBay's terms of service that prohibits merchants from using Google Checkout.

But Durzy, while agreeing that eBay is pleased Google canceled the controversial "Freedom Party," said the timing of its experiment was mere coincidence.

"We're constantly experimenting," Durzy said.

A Google spokesperson told internetnews.com he couldn't comment on "individual advertiser relationships or spending" other than to say Google "look[s] forward to a continued positive relationship with eBay."

But a source familiar with the matter said the connection between eBay's displeasure with Google's Boston party and eBay's decision to withhold its enormous ad spend is real.

This source said eBay does in fact experiment constantly, but that there's no doubt Google's party helped catalyze eBay's experimentation.

Google announced the party in a blog post on Monday. "Are you an online seller attending eBay Live! in Boston this week? If so, join us for a celebration of user choice at the Google Checkout Freedom Party on Thursday night (6/14)," the post read.

But by yesterday, Google had canceled the event, announcing the decision in another post. "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," it read.

At the heart of the matter is the reality of "co-opetition," the sometimes uncomfortable combination of competition and cooperation between businesses on the Internet. In this case, eBay depends on Google advertising to refer buyers to its site, and Google depends on eBay's advertising budget for much of its revenue. But the companies also compete.

Google insists Google Checkout isn't supposed to compete with eBay's payment service PayPal. But industry watchers don't necessarily believe that, and eBay might not either. And even if Google Checkout isn't necessarily supposed to dig into eBay's revenues, the payments system could help Google create a marketplace of buyers and sellers to rival eBay's.

So for Google to show up at eBay Live ready to hand out invitations to its own party was likely off-putting. That much even Durzy would admit.

"It was disappointing," Durzy said of the party. "We were pleased to see it canceled."