EBay questions value of Google’s main advertising service
14 Mar 2013
The value of Google Inc's main advertising service has been called into question by EBay Inc, operator of one of the largest online marketplaces, in a recent study.
EBay, one of the biggest online advertisers, released a study on Friday, that looked at whether the paid search ads it bought on Google and that showed up to the right of search results were worth the investment.
"The conclusion: incremental revenue from paid search was far smaller than expected because existing customers would have come to eBay regardless, whether directly or through other marketing channels," eBay spokeswoman Johnna Hoff wrote in an email to Reuters on Tuesday.
According to analysts, the study served to highlight a potential problem for Google, whose ad revenue was $46 billion last year, up from $38 billion in 2011.
They point out that a number of leading e-commerce companies, like eBay and Amazon.com Inc, that had traditionally been big buyers of Google paid search ads may have little use for the service now.
According to Oren Etzioni, an online search expert at the University of Washington and co-founder of shopping search service Decide.com, this had to be a major concern for Google, with strong brands like eBay, Amazon, and others needing Google less and less with their establishing a loyal online following.