• The New York Times, Monday, June 18, 2007 10:45 AM

eBay's defensive tactics against Google probably have something to do with its flagging U.S. auctions business. In the latest quarter, eBay's net U.S. revenue from auctions was up just 1%, while listings volume was down 3.8%from last year. Analysts put this down to eBay.com's longstanding clutter/interface problem, while stiffer e-commerce competition has made it difficult for the maturing Web giant to grow.

However, at the "eBay Live" conference there were some significant changes, including a new interface, a more predictive/personalized way to deliver search results and a decrease in fees for certain services and shipping charges using UPS. Its auction problems are perhaps why the Google Checkout competition has been ill-received. Google is aggressively pushing eBay merchants to use Checkout, a direct competitor to eBay's payment service PayPal--which has is all but single-handedly driving the company's growth these days.

Competition from one of eBay's business partners is not welcome, underscored by its decision to pull Google ads after the search giant scheduled a party for merchants on the same day as eBay's "Live" conference. It's no surprise that eBay has twice now retaliated to the threat by turning its back on Google, first by banning Checkout (officially, for privacy concerns), and second by pulling its ads from Google.com, citing a search efficiency experiment.

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