Google Loses their Biggest Advertiser - eBay

When most people think of eBay, they think of online auctions. After all, eBay is quite possibly the largest marketplace on the Internet. What many people don't realize is that eBay has another highly profitable company in PayPal (which eBay acquired in 2002).
However, you can be sure that Google is keenly aware of that eBay owns PayPal. That's because eBay recently banned Google's version of PayPal (aka Google Checkout) from eBay.
Google naturally did what any multi-billion dollar company would do in such a situation – they organized a protest. This protest was designed to coincide with the eBay Live! conference in Boston. Google called their protest Let Freedom Ring and planned to have it take place on Flag Day at the site of the Boston Tea Party.
eBay was not particularly pleased with Google stealing their thunder during one of eBay's most important conferences, and proceeded to pull all their AdWords ads in the United States (kind of like dumping tea overboard, but Internet style).
Now, eBay is Google's single largest AdWords advertiser by far, and Google, faced with a principled stand or the loss of 2% of their revenue, did what any indignant multi-billion dollar corporation would do – they caved and canceled their protest.
eBay has since decided to return their ads to Google, but is now planning to move more of their ad budget to Google's competitors. eBay also claims that their traffic actually increased after they pulled their ads, although this could have been due to increased media exposure
What this little incident demonstrates is that pay-per-click advertising may not always be the best bang for the buck, as eBay appears to have found out. In fact, eBay argues that the reason they pulled their ads had nothing to do with protests and Google Checkout, but rather with an attempt to reassess how to best spend their marketing dollars online.
They claim that this move had been planned for some time and just happened to coincide with their public spat with Google. If that's true, then Google has real reason to be concerned, as it may indicate that large companies don't need to be quite as dependent on pay-per-click advertising as they might think.
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