I don't think there is any other choice internationally for ebay. GOOG is so far ahead , ebay would be foolish not to choose GOOG.
EBay Chooses Google to Run Ads on Sites Outside U.S. (Update1)
By Jonathan Thaw and Chris Burritt
Aug. 28 (Bloomberg) -- EBay Inc. chose Google Inc. to run advertising on its Web sites outside the U.S. to help counter slowing growth at its main online auction business.
The companies will also introduce ``click to call'' ads on their sites in the U.S. and abroad, allowing advertisers to reach consumers using Web-calling software, EBay Chief Executive Officer Meg Whitman said. Google, the most-used search engine, and EBay, the biggest online auctioneer, will share ad sales and didn't release specific terms.
EBay, whose shares are headed for their worst performance in six years, is turning to Internet calling and advertising partners to boost revenue as rival auction sites take customers. The decision comes three months after the San Jose, California- based company said it would show ads from Yahoo! Inc. in the U.S.
``This is definitely the Yahoo deal for the international markets,'' said Scott Devitt, an analyst at Stifel Nicolaus in Manassas, Virginia, who has ``buy'' ratings on EBay, Google and Yahoo and doesn't own their shares. He said the ad agreements with both Yahoo and Google ``may help EBay over time.''
Separately, Google today started offering free, customizable e-mail and calendar software to businesses and universities to lure more corporate customers and develop a new source of revenue. Google will offer a paid version by the end of the year that comes with extra support and lets customers opt out of receiving ads next to their e-mail.
Google shares rose $2.54 to $375.80 in early Nasdaq Stock Market trading. They had dropped 10 percent this year before today. EBay shares gained 77 cents to $26.07.
Skype Option
EBay said it doesn't expect the agreement to have an effect on earnings either this year or in 2007. Ads from Mountain View, California-based Google will start appearing on EBay early next year, Schmidt said.
``Tighter integration for EBay advertisers will generate more, better, high-quality ads and more clicks and more revenue for both companies,'' Google CEO Eric Schmidt, 51, said yesterday in an interview.
EBay also agreed to give customers downloading its Skype Internet calling software the option of getting Google's toolbar for Web browsers. Skype, which has more than 100 million users, will also be added as a button to Google's toolbar.
``We are sort of piggybacking on their success there,'' Schmidt said. ``That generates more searches and that generates more ad clicks.''
The companies said they will explore enabling Skype users and users of Google's Google Talk Web calling software to exchange messages. EBay bought Skype Technologies SA for $2.6 billion in October 2005, its largest acquisition ever.
Click to Call
The agreement marks a push by both companies into the market for ``click to call'' advertising. The ads let users place phone calls to companies through either Skype or Google Talk when they click a link or icon. The ads may appeal to local companies such as plumbers or electricians that don't have a Web site.
EBay chose Google because of the company's strength in markets outside the U.S., especially in Europe, Whitman, 50, said. She said EBay has the capacity to handle relationships with both Sunnyvale, California-based Yahoo and Google.
EBay's U.S. auction revenue increased 20 percent in the second quarter, slowing from growth of 27 percent in the second quarter of 2005. International auction growth of 24 percent compared with a gain of 51 percent a year earlier.
Piper Jaffray & Co. analyst Safa Rashtchy last week cut EBay to ``underperform'' from ``market perform,'' citing ``little positive reaction'' from efforts such as EBay Express to spur revenue growth. EBay Express sells new merchandise at fixed prices, competing with Amazon.com Inc. in categories such as electronics and clothing.
Microsoft Efforts
Today's accord also underscores how Google, Yahoo and Microsoft Corp. are jostling to get ads in front of as many Web users as possible. Redmond, Washington-based Microsoft last week said it will show ads on the Facebook friend finder site. Google signed agreements with Time Warner Inc.'s AOL in December and News Corp.'s MySpace.com friend finder on Aug. 7.
Google the same day said it would distribute video clips with ads from Viacom Inc.'s MTV Networks.
``We now have strategic deals in four to five new areas,'' Schmidt said. ``You can now plot our expansion based on that.''
To contact the reporters on this story: Jonathan Thaw in San Francisco at jthaw@bloomberg.net Chris Burritt in Greensboro, North Carolina, at cburritt@bloomberg.net ; |
