EBay study questions value of Google's main ad service

SAN FRANCISCO (REUTERS) - EBay, operator of one of the largest online marketplaces, questioned the value of Google's main advertising service in a recent study.

EBay, one of the biggest Internet advertisers, released a study on Friday examining whether the paid search ads it bought on Google and that show up to the right of search results were worth the investment.

"The conclusion: Incremental revenue from paid search was far smaller than expected because existing customers would have come to eBay regardless, whether directly or through other marketing channels," eBay spokesman Johnna Hoff wrote in an e-mail to Reuters on Tuesday.

The study highlights a potential problem for Google, which generated US$46 billion (S$57 billion) in ad revenue last year, up from US$38 billion in 2011. Some leading e-commerce companies, such as eBay and Amazon.com, which have traditionally been big buyers of Google paid search ads, may not need the service as much anymore.