Michael Arrington sums it up quite nicely, so here is the short version:

Not much commentary is needed on this one. Here’s what happened:

1. eBay doesn’t allow merchants to use Google Checkout to settle eBay transactions. Google invited eBay online sellers attending eBay Live! in Boston this week to a party that they called the Google Checkout Freedom Party.
2. eBay decides to pull all U.S. advertising on Google.
3. Google backs down, cancels the party.
4. Google looks like a complete wimp; eBay looks like a bully.

The party appeared to be nothing more than Google poking a little fun at eBay’s restrictive policies. eBay hit back with the biggest weapon they had, suggesting that tension between the companies goes very deep.

That was a seriously good laugh this morning!

So the big question… who’s “Click” is bigger? Adam Viener does a quick roundup on Revenews as well.

Bottom line, is that Google & eBay are becoming more competitive with each other every day and such a conflict was inevitable, to answer my question though, I would argue that Google has a much bigger “Click” and if they REALLY had to pull out all the stops, they could easily “improve” their algorithms to factor in a lot of the “Search Engine Optimization” work that eBay have done across their companies – and users would find that eBay would appear a lot lower in the natural results.

But then let’s remember that Google’s motto is “Do No (Relative) Evil”!