Google, eBay Team on Text Ads, Click to Call

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Google and eBay have signed a multi-year agreement to connect users, merchants and advertisers around the world.

The deal involves two components: text-based advertising and a click-to-call ad functionality. It comes soon after auction platform eBay decided to ditch its DoubleClick DART-driven keyword ad program -- sellers bidding for text and display ads on its site, not much of which happened -- and opt for Yahoo's pay-per-click ads.

"Google and Yahoo have two PPC marketplaces that will become more similar once Yahoo rolls out the final portion of Panama early next year," said Kevin Lee, chairman of Did-it Search Marketing, New York.

"However, because it is too early to determine who the winners will be with regard to the highest yield on paid listings, eBay is clearly testing which platform they prefer," he said. "By putting in place separate international and U.S. deals, eBay gives itself flexibility for the future."

The click-to-call capability will let a user click on a link within an ad, initiating an Internet voice call to eBay merchants or Google advertisers directly from either company's respective sites, using Skype or Google Talk. EBay owns Skype, a free instant messenger and Internet telephony provider.

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

"One of the biggest advantages of click-to-call is that you have a person talking to another person, and that introduces at least the possibility of persuasion," said Fredrick Marckini, CEO of iProspect, Watertown, MA. "While a Web page can certainly convert a visitor, a sales person will have the opportunity to ask additional discovery questions and can then field objections and can ask for a sale repeatedly. I'd put my money on human persuasion nine out of 10 times."

Also, Google will become the text-based advertising provider for eBay outside the United States. Google advertisers will get access to a large online community while enhancing the shopping experience for eBay buyers, making it easy to find what they are looking for.

"There is enormous potential for the market, and the Google/eBay deal further underscores that fact," said Marc Barach, chief marketing officer of Ingenio, San Francisco. "Many businesses are accustomed to doing business over the phone, and by utilizing these services from Ingenio or other providers they have a way to efficiently locate and connect with buyers who see their ad listings online. We anticipate this market will enjoy exponential growth over the next few years."

The financial terms of the deal will involve revenue sharing. Google and eBay plan to begin testing the text-based advertising and click-to-call in early 2007.

"EBay has determined that one can make money off of visitors to their site not exclusively through completed auctions, but also through advertising," Mr. Lee said. "The Google and eBay deal gives eBay an opportunity to experiment with a partner who has thousands or hundreds of thousands of advertisers internationally.

"Also, the click-to-call aspects of the deal are a great way for both Internet giants to tap into the fact that many international cultures may not be comfortable purchasing online but are more than happy to make a call or receive a call from a merchant or advertiser," he said.

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