Google, eBay Make Nice on Text Ads, Click-to-Call

Looking to shore up their position against Microsoft and Yahoo in the fiercely competitive market for Internet advertising services, Google and eBay struck a multi-year deal to work together on text-based and click-to-call advertising.

Financial terms of the deal, which mirrors one Yahoo lined up with eBay in May, were not disclosed.

Google and eBay said parts of the deal include revenue sharing.

Google , which has built its empire on search-oriented advertising, will become the exclusive text-based advertising provider for eBay outside the U.S.

Tapping into eBay’s  overseas community should give Google access to millions of users, while making it easier for eBay customers to find what they are looking for online.

The companies will also integrate eBay’s Skype Voice over Internet Protocol (VoIP)  and Google’s Talk online call software in eBay’s and Google’s shopping and search platforms.

The click-to-call feature will allow a user to click on a link or icon within a product or service ad to initiate an Internet voice call to eBay merchants or Google advertisers directly from either company’s sites, using Skype or Google Talk.

Skype will offer its users the option to download the Google Toolbar, to which Skype will add a custom button.

The companies will also look into making Skype and Google Talk interoperable through open standards to enable text chat and online presence.

The deal helps eBay find its footing in overseas markets for more growth opportunities amid signs the online auction site is maturing.

It’s also a reminder of how rivals are lining up their mutual interests in the fast-growing online ad market, especially overseas.

When Yahoo and eBay announced their similar deal, which also includes revenue sharing on text-based ads they serve up, analysts viewed it as a great fit, but one destined to strain the relationship between eBay and Google.

After all, Google recently launched two initiatives squarely in eBay’s turf: Google Base, a do-it-yourself online database that lets people list stuff for sale, and Google Payments, similar to eBay’s PayPal payment service.

If the consensus then was that eBay needs Google more than Google needs eBay, then it appears eBay’s needs just got met with the Google alignment.

Text-based advertising has been a huge success (and occasional legal headache) with search and online commerce players.

Google, eBay, Microsoft  and Yahoo  are all looking at click-to-call advertising lined up with e-commerce model as part of that growth opportunity.

The vendors believe blending VoIP technologies with e-commerce will bring more buyers and sellers together, opening up new ways for advertisers and merchants to generate customer leads through the Internet.

This is especially important for merchants or advertisers who may not have a Web site, or who currently use local directories to reach potential customers.

“People continue to evolve how they shop, communicate and advertise online,” said eBay President and CEO Meg Whitman in a statement.

“By combining the power of eBay in ecommerce and Skype in communications with Google’s leadership in search and advertising, we can increase the usefulness of the Internet for shoppers, merchants and advertisers around the world.”

The companies said they plan to test the text-based advertising and click-to-call moves for several months, beginning in early 2007.

The deal with eBay is the second major contract Google has signed this month as it continues on its quest to make money from online advertising and other Internet services to keep Microsoft, Yahoo and eBay in the rearview mirror.

The search giant struck a three-year, $900 million advertising deal with News Corp. to provide search and advertising through, IGN and other Fox Interactive Media Web sites owned by the media giant.

News Around the Web