By silicon.com, 11 July 2006 10:00
eBay has announced it will ban users of its online auctions from using Google's new online payment service, Checkout.
In the short-term this might help its payment brand PayPal retain its status as a dominant player but in the end it will only cause several negative outcomes.
The first is to boost the publicity of Checkout. As if Google weren't a big enough brand with each new product release getting plenty of press, eBay's ban will give it even more attention.
The second is that it causes bad blood between companies on the internet. Everyone knows that partnerships drive traffic to a website. What's to prevent Google from removing every reference to eBay on its search results as a gesture of retaliation?
Even more importantly, their customers will lose out - as they always do in spats like this. They just want to use the best product and don't care who makes it.
If eBay is steering people to PayPal to protect its own interests, it will backfire with poor customer loyalty.
eBay should also heed Google's global presence. It's everywhere. eBay and PayPal operate in several countries too but PayPal in particular receives much less attention than Google. Google could win the payments war if eBay wants to go head-to-head, so perhaps the online auctioneer should find ways of working with the search company.
On the other hand, you can see eBay's point. If someone steps on your patch (one that's been yours for a few years), you'd get territorial too and take measures to keep them out. And eBay has been careful to point out it's only banning Checkout because it doesn't meet the security and safety standard set in its payments policy.
But taking on Google will be tough even for a more established player such as eBay. We just hope both sides stay mindful of the reason they became the giants they are in the first place - the affection and loyalty of their customers.
Comments
There are 6 comments. Join the discussion
1. anonymous
For one thing, Google decided not to display shopping cart icon on ads if a merchant is using PayPal or any other gateways for that matter. Why should eBay promote Google checkout if Google is not giving a damn thing about supporting PayPal and other gateways. They are building their 'Google is the center of universe' empire. Why should others make it easier for them?
2. anonymous
Google would never remove organic search results as a competitive retaliation.
To sugges such shows how little this author knows about Google.
3. Kent Dodds
Google will NOT remove search results about Ebay from their index. The integrity and fairness of Google will not allow a shallow move like that. Though I agree with the rest of the comments.
4. anonymous
This is pure BS! PayPal is already a global online payment standard and they have first mover advantage. Google is going in absolutely wrong direction. They are acquiring merchants first. They need to acquire buyers first. It is a classic chicken and egg problem.
5. anonymous
wrong! PayPal acquired merchants first - namely eBay. without eBay, PayPal would never have become a household name. Even to this day, eBay constitutes 70% of PayPal's volume.
6. Sam Hughes
This shouldn't be an issue, if it's not safe then of course e-bay can't allow it, they have enough problems with fraud and Western Union payments already. Just because it's Google? Google is a well branded search engine and not much more from what I can understand. I know there's lots of hype around their market value etc but personally I would be comfortable letting Google know my banking details as they seem bent on breaking every data security rule available with their other offerings. Some of their exec level statements have been ridiculously naive and trusting them is not quite what I would call a wise move at this stage. Many have compared Google to Microsoft interms of agressive growth and MS are not exactly the most popular company in the world. Google need to be more cautious, 'all the gear and no idea' springs to mind!!