EcommerceBytes-NewsFlash, Number 1125 - October 10, 2005     1 of 3

Making the Case for eBay Paid Search

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Anthony Noto, a Goldman Sachs analyst, told the Wall Street Journal he believes Skype can help eBay generate revenue from the 1.9 billion monthly searches that take place on its sites by posting pay-per-call sponsored listings, or paid advertising, on the top of search-results pages.

An auction site putting paid listings on search results pages is not unheard of - and in fact, it's already being done. Yahoo Auctions tested the approach in January using its Yahoo Search Marketing ad network (http://auctionbytes.com/cab/abn/y05/m01/i12/s03).

Yahoo's test was apparently a success, because in June, it eliminated all fees on its auction site and turned to a paid-advertising model (http://www.auctionbytes.com/cab/abn/y05/m06/i07/s01).

One difference between the two programs is that Yahoo Search Marketing is a cost-per-click model; visitors to Yahoo Auctions click on the ad and are taken to the advertiser's webste. Noto is suggesting eBay might try a pay-per-call model, in which visitors to eBay auctions click on ads resulting in a phone call to the advertiser through Skype's service. In fact, some eBay sellers are already using pay-per-call technology within their listings using a service from ThinkingVoice (http://www.thinkingvoice.com).

But the biggest difference between Yahoo running paid advertising on its auction site and eBay is that eBay sellers are paying insertion fees to have their listings show up on the search results pages. eBay has a paid-search program called eBay Keywords (http://digbig.com/4ewwe), but how would sellers feel about competing with a more aggressive paid-search program? Sellers hollered a few years ago when eBay added banners for sites with competing products and vowed not to do it again.

eBay would not have to limit pay-per-call ads to eBay.com real estate. It has a growing stable of online classifieds sites and a shopping-comparison site, Shopping.com. eBay could even consider going head-to-head with Yahoo Search Marketing and Google AdWords, serving up ads on independent websites. eBay knows a lot about paid search - it claims it is Google's biggest paid-search advertiser. (Its affiliate marketers are also heavy paid-search users.)

The debate continues over eBay's true plans for Skype. Time will tell if Goldman Sachs' Noto has eBay's number.


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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