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Merchants: eBay ad programs drive buyers away
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Written by Daniel   
Monday, 08 October 2007 10:24

 Merchants: eBay ad programs drive buyers away
Online auction site's revenue nearly doubled but sellers take issue with ads they have to compete against

By Juan Carlos Perez, IDG News Service, Info World
October 08, 2007
EBay Inc. has significantly boosted its advertising revenue since last year, but some sellers worry that the company's efforts in this area are driving potential buyers away from the online marketplace.

Last year, eBay signed deals to run ads from the Google Inc. and Yahoo Inc. networks in order to better capitalize on the massive traffic it draws to its Web sites, primarily its core eBay.com marketplace.

The strategy seems to be working: In 2007's second quarter, ended June 30, eBay's advertising revenue almost doubled compared with the same period in 2006.

The very influential Professional eBay Sellers Alliance (PESA), a group of large eBay sellers, has been watching from the sidelines with increasing concern and skepticism.

"Having those ads on the Web site we view as very negative. Encouraging people to leave eBay can never be good for the seller who is paying to be on the marketplace," said Jonathan Garriss, PESA's executive director.

While eBay has had advertising on its Web site for years, sellers generally hadn't perceived it as a major threat, for a variety of reasons.

For instance, the advertising program that the Yahoo deal replaced in May of last year was run in-house by eBay and was designed to let eBay sellers promote their products in the marketplace. In other words, the ads didn't link outside of the eBay Web sites.

Also, whenever eBay has allowed external ads in its sites, as it did in the late 1990s and early 2000's via a deal with AOL LLC, the ads weren't as precisely targeted as is possible with the current ad-matching technology from Google and Yahoo.... MORE   Comment in the Forums
 

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