Online auction site eBay has come under fire from sellers that are critical of the company's policy of using contextual advertising, as they feel that these ads could be luring potential buyers away from the site.

The auction giant starting running ads from Google and Yahoo! last year and, according to Juan Carlos Perez, sellers are unhappy that the targeted ads compete with products that are already on eBay.

According to Jonathan Gariss, executive director of the Professional eBay Seller's Alliance:

“Having those ads on the Web site we view as very negative. Encouraging people to leave eBay can never be good for the seller who is paying to be on the marketplace.”

The new advertising arrangement has been good for eBay at least - the company's ad revenue for the second quarter of 2007 was $76m, a 96% increase on the same period last year.  

The auction giant doesn't agree that the ads are having an adverse effect on sales on the site- according to Steve Hartman, Director of On-Site Advertising for eBay:

"Our advertising efforts have shown no significant impact to our core transaction business, and subsequently to our sellers' revenue, which further convinces us that we are on the right path."

Related stories:
eBay to limit Google ad spend
Profits up by 50% for eBay 

Graham Charlton

Published 8 October, 2007 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

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