Google (GOOG) planned to have a party to upstage Ebay’s (EBAY) big confab for its online payment system, Paypal. Googe runs a competing systems call CheckOut. CheckOut has not done very well, so it thought if it invited some PayPal customers to a party, they might switch.
It didn’t work out that way. Ebay, which was the largest buyer of Google Adwords in the first quarter, according to NetRatings, canceled all of its marketing on Google.
Google is learning that being in businesses beyond search is going to cost it money from time to time. It now competes with almost everyone one the internet. Google has a product search area. It sells ads there that may compete with the listings. Its calendar, documents, and spreadsheet products compete with Microsoft (MS).
Google has few natural enemies. It is too large and successful. But, through rapid expansion, it could become its own worst foe driving off customers that it now competes with.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about