• by Tameka Kee , June 14, 2007

eBay has reportedly pulled all its paid search ads from Google's AdWords network in the U.S.

Though spokesperson Hani Durzy alluded to the "reallocation" being part of eBay's continuous efforts toward optimizing their marketing budget, industry speculation points toward deteriorating relations between the two companies.

Insiders say this move represents an opportunity for eBay to shift even more of its advertising resources to Yahoo. Just last year, the auction marketplace announced a deal that made Yahoo the exclusive provider of search and display ads for eBay's sites in the U.S.--in lieu of Google.

As Google has grown, the search giant has become less of a partner and more of a competitor to eBay, especially with the launch of Google Checkout (an online transaction system that rivals eBay's PayPal), and Google Base (a product listing marketplace).

Google has even sought to pressure eBay into offering consumers Google Checkout as an alternate payment method by reaching out to disgruntled eBay merchants and hosting a "protest party" in Boston. The event coincides with today's eBay Live, eBay's annual conference where merchants can network and learn more about business-building products and services.

Durzy acknowledged eBay's annoyance with Google's decision to hold the protest party, saying "we are disappointed that Google has chosen this time to detract from our annual event ... it's not the kind of activity one partner normally does with another."

The company didn't reveal a timetable for when it might reinstate its paid search ads in Google's U.S. AdWords system.