The Google vs. eBay War Heats Up

Google and eBay's bitter rivalry has finally reached a boiling point. When Google decided to throw a party in the middle of an eBay conference, they sure ruffled some feathers over at eBay.

This week, eBay held a three-day eBay Live marketing event in Boston. Hoping to spoil the party and lure away a few customers, tech experts, and partners, Google decided to throw a party of their own. But of course, in true Google fashion, they decided to one-up eBay with an attractive set of features.

At the Google Checkout Party which was supposed to be held tonight, Google promised free food, drinks, and massages. They described the event as a "celebration of user choice", urging party-goers to "let freedom ring."

eBay didn't take the threat lightly, and immediately withdrew all its US advertising from Google's website. Somewhat shocked by the response, Google backed down and called off the shindig.

While eBay didn't come right out and say that Google's actions were the reason they pulled advertising, the message was pretty clear. An eBay spokesman did, however, acknowledge their displeasure: "We don't view that kind of activity as an appropriate activity for one partner to do to another."

Google issued a statement on the Checkout blog, saying attendees had "plenty of other activities to keep them busy", and that "After speaking with officials at eBay, we at Google agreed it was better for us not to feature this event during the eBay Live conference."

The two companies have a love/hate relationship. eBay's Adwords ads drove a lot of people to the auction site, and Google profited up to $25 million per year on the eBay ad purchases. But eBay's PayPal was directly threatened when Google launched its own online payment service - Google Checkout - last year. And since then, they've been working together nicely while also gritting their teeth and forcing out a smile.

What happens next will be of major interest to both parties involved.