Google and eBay end search for ad partners


Internet search engine Google has revealed that it has secured a deal to become the exclusive provider of text-based advertising for online auction company eBay, outside of the US.

Under the agreement the two companies will also combine their so-called "click-to-call" services, which allow online shoppers to phone companies directly through their advertisements.

The deal secured by Google will come as a blow to rival search engine Yahoo, which signed a similar agreement with eBay in May to provide advertising on the company's US websites.

Competition between Yahoo, Google and MSN has become increasingly fierce over the past year as the three rival companies fight to secure advertising space on popular websites.

Google said that the financial terms for certain components of the deal involve revenue sharing, but has not disclosed specific details of the agreement, which eBay says is unlikely to have a material impact on its financial results in until 2008.

The companies plan to begin testing their new text-based advertising and click-to-call initiatives, which will combine eBay's existing online phone service, Skype with similar service Google Talk, in early 2007.

Welcoming the agreement announced between the two firms, eBay chief executive Meg Whitman said: "People continue to evolve how they shop, communicate and advertise online.

"By combining the power of eBay in ecommerce and Skype in communications with Google's leadership in search and advertising, we can increase the usefulness of the internet for shoppers, merchants and advertisers around the world."

Google chief executive Eric Schmidt said the deal highlighted how much the search engine valued eBay as a business partner.

"Our technologies will allow us to connect users to relevant advertising across eBay's international properties," he said.

"By working together to promote click-to-call functionality through Google Talk and Skype, we are offering advertisers another innovative way to connect with customers."

In a separate announcement this weekend, Google revealed that it intended to enter the business software market.

The company's decision to launch a range of free software programmes for companies, including online programmes for e-mail and calendar applications, will bring Google into direct competition with Microsoft, which is currently updating its Office software package.

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