Grass Is Always Greener: EBay and Google

The Web is all abuzz with the Grass Is Always Greener On The Other Side Of the Firewall stories about Google preparing an online payment system (a la EBay's PayPal) to be called GBuy while EBay is preparing a contextual Web ad service (a la Google's AdWords) to be called EBay AdContext.

But the most reality-based analysis is that Ebay and Google are proving to be the quintessential example of coopertition (is there an accepted spelling yet for that blend of cooperation and competition?). Google is already sending a lot of business to EBay and EBay is returning the favor. If you look beyond the headlines, both services have key differences that make them truly not rivals.

EBay's contextual ad offering will?logically enough?limit itself to offering auction ads directly relating to their current auctions. Not only is that not a service that Google offers, it's a perfect companion to Google's AdWords. It wouldn't surprise me in the least to see sites showing contextual ads from both Google and EBay.

As for GBuy, that's closer to competition, but it's likely that Google and EBay's PayPal will fairly quickly calm down to their neutral corners.

John Battelle's SearchBlog lays out the synergy arguments between Google and EBay quite well, even including a fascinating PDF of an MBA term paper that examined the issue.