Google and eBay make peace

Sweetness and light has broken out between Google and eBay after a period in which daggers appeared drawn. On Monday the companies announced a deal involving text-based advertising and ‘click-to-call’ advertising. They also announced that they would be working together to support each other’s voice offerings.

Under the deal Google will become the exclusive text-based advertising provider for eBay outside the United States. The announcement is a bit of a surprise for the industry as only in May, eBay signed a multiyear agreement with Yahoo! for search and advertising services to the auction site’s millions of customers in the US.

This latest deal covers the rest of the world and is possibly more lucrative. Doubtless the eBay board used the Yahoo! deal to get better terms from Google for the international business.

In addition, eBay and Google plan to integrate and launch ‘click-to-call’ advertising functionality that uses both Skype and Google Talk in each company’s respective shopping and search platforms.

The companies plan to pilot the text-based advertising and click-to-call initiatives in early 2007 with eventual roll-out depending on the early tests. The companies admitted some parts of the deal involve revenue sharing, but did not reveal any further information as to the exact nature of the agreement.

As part of the deal Skype will also offer its users a customised version of the popular Google Toolbar which will include a connect to Skype button. The two companies are also looking to develop interoperability between Skype and Google Talk via open standards to enable text chat and online presence.

Recently, Google had looked to have eBay in its sights with the introduction of the Google Base classified ads system and the Checkout online payment system. eBay, for its part has banned the use of Checkout as a payment method on its auction site branding it as ‘not appropriate’ for its users.

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