eBay and Google, the codependent couple who love to hate
In yesterday's earnings call, eBay CEO Meg Whitman's comments on her company's relationship with Google sound like every codependent couple we know: They'll last forever, sparring all the while, or end disastrously. In the meantime, each partner will use every opportunity to chew your ear off about the other partner, hoping to gain leverage over the other in their petty, public battles. And if things get ugly? They'll just pretend they don't even exist:
Whitman only mentioned Google once, unsolicited, on equal footing with rival Yahoo. (Both companies have deals to broker ads on eBay's websites.) "As for our growing advertising business, our partnerships with Yahoo and Google are going well." Sure, eBay's cheating on Google, but really, it's fine. They have an understanding.
So you cancel a big soiree, throw your partner out for the night, or withhold the goodies. No big deal. It happens.
Even eBay CFO Bob Swan picked up the passive-aggressive vibe in his mechanical recitation of the numbers:
Advertising and other revenue was up 77 percent versus the prior year, increasing from 3.1 percent of total marketplaces revenue last quarter to 4.2 percent this quarter. This acceleration was driven primarily by the launch of advertising in our international eBay businesses.
Google is providing eBay's international advertising, Yahoo its domestic ads. (A girl in every port.) But eBay won't give them any credit. Not by name. You have the power in the relationship, not them.
When Meg Whitman was asked directly about the relationship, she replied:
Late in the quarter, as you know, we ran an experiment to see what would happen if we were to change our allocation of Internet marketing between our largest providers.
The one you've been sleeping with all these years, you mean?
As you know, we pulled back from Google, reallocated to AOL, Ask Jeeves and Yahoo! in particular. It has to do with return on investment, where we can get the most leverage.
And there's the rub. Whitman knows that Eric Schmidt's Google is a steady breadwinner, but the love is gone. eBay just wants someone to love it for who it is — and maybe improve its revenue-sharing deals.
As you know, we have gone back to spending some money on Google. We will continue to reallocate not only between [Internet marketing] engines as we go forward on particular words, but also, frankly, we are reevaluating our spend between offline and online.
It's not you. It's me. We've heard that line before.
Meg, maybe you and Eric should have a nice private conversation and work this thing out. Now that Google has come clean about its own problems, you might get a little more love.