EBay is having its huge eBay Live conference this week in Boston, and Google decided to crash the eBay lovefest with a big blowout promoting its Google Checkout product. This doesn’t sound terrible, but Google Checkout is not supported by eBay, since eBay owns the extremely profitable company PayPal. Google promoted its Checkout party with fliers containing slogans like “Let Freedom Ring” on them, inferring that eBay oppressing its users by forcing them to use PayPal. Not exactly something you should do to a business partner.

The party and slogans pushed eBay over the edge, so they decided to something unprecedented - shut down their US AdWords account!

That’s right, eBay actually stood up to big G and shut off their AdWords ads yesterday…a move that could potentially cost Google a little under $25,000,000 per quarter. Not a ton of money when you consider Google brought in $3.7 billion last quarter, but still, I see it as a high profile example of how Google’s cockiness towards its partners can and will backfire.

I suppose only time will tell if this incident will lead to a larger move within Google to start considering how their actions and perceived superiority complex will hurt their business in the long run. My hope is that eBay’s move will at least start some discussions within the Googleplex of how they should treat all of their partners, big and small.

The latest update on this story is that Google has cancelled their Checkout party. As far as I know, eBay’s ads are still turned off.

Facts and figures from this post came from the New York Times article. Also read up on all the scuttlebutt around this story at Search Engine Land.