Google, eBay In Text and Pay-Per-Call Partnership

Google and eBay have struck a multi-year agreement to show Google’s text ads exclusively on eBay properties outside the U.S. The deal notably includes the display of click-to-call ads, monetized globally through pay-per-call billing, on both eBay’s and Google’s sites.

Click-to-call as defined in this agreement is a call connection infrastructure that will allow users to click a link on a Web page to initiate a phone call to a participating eBay seller or Google advertiser, using either Google Talk or eBay’s Skype Web-based phone applications. Those calls will be monetized through a pay-per-call billing model administered by Google, the first formal step the search company has made in that arena. The marketer would pay a fee for each call, which Google and eBay would share in some manner, though details have not been revealed.

Sellers and advertisers, especially local businesses, find a pay-per-call model appealing because they get a “hot” lead on the phone, where they will likely have a better chance of making a sale or other conversion.

Google began testing another kind of click-to-call ads last year, on a limited basis. That model allows users to click a link, enter a phone number, and receive a phone call from an advertiser.

This deal could push pay-per-call advertising into the mainstream, according to Greg Sterling, principal analyst at Sterling Market Intelligence.

“It’s very significant because Google has the dominant market share, so it instantly exposes the model to a wider audience of advertisers, gives pay-per-call more credibility, and provides much more traffic volume to pay-per-call,” Sterling told ClickZ.

It’s also a significant blow to Yahoo, which made a similar deal in May to feature Yahoo text ads on eBay’s U.S. site, with plans to explore click-to-call integration of Yahoo Messenger with Voice and Skype.

eBay’s Yahoo deal was motivated by a recent decision to seek out partners other than Google, in hopes of limiting its power. Apparently, Google’s dominance in overseas markets outweighed those concerns, Sterling said.

The companies plan on testing pay-per-click text ads early next year, and pay-per-call ads later in 2007. A timeline for full roll-outs will depend on test results and will vary by market. In addition, Google and eBay will explore interoperability between Skype and the much-smaller Google Talk to enable text chat and presence features across the two platforms. Skype will also begin offering the Google Toolbar with its downloads, adding a custom button for Skype calls.

AOL has offered pay-per-call services in its search results for more than a year, and Miva partnered with Ingenio for a pay-per-call offering in September 2004.

Microsoft is also testing a click-to-call feature on its Windows Live Local. That service allows users performing local searches to find a merchant on a map, click a link and enter their phone number and get a phone call from local merchants.

This story has been updated to clarify the distinction between pay-per-call and click-to-call in the Google/eBay agreement.