How Google should have gamed the war with Ebay Google throws a party in the fringes of Ebay's big jamboree, to woo away its biggest stores. The online auction house, by withdrawing advertising from the search engine, forces Mountain View to cancel the provocative shindig. So, did Ebay win? We haven't a clue, so we pinged someone who knows both companies really well.
Of course, Google screwed up royally. They had Ebay on the ropes and blinked. I think that the google reaction was: let's pick a different time to engage, like the Chinese approach to warfare. You have to remember that the ad sales team at Adwords is a powerful voice within Google. Ultimately, Ebay needs Google more than google needs Ebay. They're starved for buyers. Google accounts for 5-10% of buyers. Ebay's market cap is very vulnerable if they lose buyers. Ebay canceled millions of dollars of advertising as a result of a party? Methinks that they are very very worried. Do you recall the line from Shakespeare? "The Lady do'eth protest too much, methinks." When Ebay threatened to pull ads, Google should have been *more* aggressive, not less aggressive. Most of the lost revenue would route back to Google anyway.