Online auction powerhouse eBay has pulled an estimated US$25 million of advertising from Google, accusing the search giant of acting inappropriately.

eBay is said to be Google’s biggest AdWord’s customer.

The spat arose after Google decided to hold an event promoting its Google Checkout payments system in the same city, and on the same evening as eBay’s annual merchant conference, eBay Live.

“We don’t view that kind of activity as an appropriate activity for one partner to do to another,” eBay spokesperson Hani Durzy told the BBC.

eBay has so far refused to include the Google Checkout payments system as a payment option on its online auctions. eBay owns rival online payments provider PayPal.

Google has now decided to cancel its Google Checkout event.

“eBay Live attendees have plenty of activities to keep them busy this week in Boston, and we did not want to detract from that activity,” wrote Tom Oliveri on Google’s official Google Checkout blog.

“After speaking with officials at eBay, we at Google agreed that it was better for us not to feature this event during the eBay Live conference.”

Analysts say it’s likely that eBay will resume advertising on AdWords following negotiations, since eBay can ill afford to loose the traffic generated by AdWords, and Google will no doubt miss that $25 million.

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Entry was posted on Friday, June 15th, 2007 at 12:22 pm under Advertising, Google.

Read more entries by John Pospisil.
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