Last week we reported that eBay has banned Google Checkout, something that is likely to backfire on the auction giant, which owns rival payment processor PayPal.

Silicon has today published a timely analysis of why eBay is more likely to suffer than Big G.

Meanwhile, I have been looking for the smoking gun that might force Google to retaliate, leading to the possible banning of eBay from its search results. Hard to imagine it could come to that, but who knows?

eBaymust spend many (tens of?) millions on Google Adwords, buying up all kinds of keywords and phrases. And hell, it even buys letters too, like the letter ‘E’:

eBay even buys letters on Adwords

Google must love this sort of thing. Nevertheless, you have to feel that eBay would come off worse in a streetfight with Google, despite its relationship with Yahoo.

As an online brand eBay is one of the best known, but many consumers begin their product searches on search engines, and Google is the biggest by some distance, so a ban would eat into eBay’s earnings just like it does with any other company. Not being listed on Google is bad news for a company of any size.

Could Google ban eBay from its organic listings? It would need some firm evidence before doing so, and so far I can’t see any major issues with eBay, from an SEO perspective.

But what about Adwords? Would Google prevent eBay from using its contextual ad network? Would it turn down the tens of millions eBay must spend to achieve such widespread visibility? You’d think not, unless there was a serious reason

Well, it turns out that there is something serious going on, albeit at a relatively small scale. You see, eBay users are selling click fraud services, according to an article on Blogging Stocks.

A search on eBay for ‘Adsense clicks’ returns a number of auctions, where you can purchase “5 Google Adsense clicks each day for 5 days” for a Buy-It-Now price of just $1.99.

Blogging Stocks’ Michael Rogers says: “This raises some interesting questions, chief among them: doesn’t this violate eBay’s listing policy against ‘encouraging illegal activity’? Or perhaps this is one of those grey areas where eBay chooses to look the other way – particularly considering that the particular ox being gored here is rapidly turning into their number one competitor.”

This is something that eBay needs to quickly address if it is to avoid further damaging its relationship with the internet Motherlode.

Google is already on dangerous ground with regards to click fraud. It needs to pacify advertisers, who are become increasingly concerned about paying for clicks.

Is this the smoking gun?