eBay sellers began noticing ads appearing on some search results pages on Tuesday. The ads are paid-search ads from Yahoo Search Marketing (similar to the Google AdWords program) and are part of the agreement eBay entered into with Yahoo in May (http://auctionbytes.com/cab/abn/y06/m05/i25/s03). Many of the sellers who commented on the appearance of the ads seemed to have no knowledge that the eBay-Yahoo partnership entailed such ads, nor did they seem pleased about them.

In May, eBay North America President Bill Cobb had stated that the Yahoo ads would be for complementary products and services. "For example, a buyer searching for a hair dryer might be presented with sponsored search ads for related items like shampoo or hair brushes" (http://www2.ebay.com/aw/core/200605250457542.html).

However, the tests running this week appear to be for competing products in some cases. A search for "burberry rain boats" (a misspelling for both burberry rain coats and burberry rain boots) brought back zero eBay listings and three Yahoo advertisements, including one with a link to the Burberry website.

eBay spokesperson Catherine England explained , "Bill Cobb spoke about the possibility of presenting "complementary" ads on eBay searches that yielded results - where the ads would feature items related or complementary to the term searched. That may be something we test in the future; what we are currently testing is the display of Yahoo text ads on eBay searches that yield no results. As the test continues, we will continue to refine what gets displayed and when."

England explained that eBay has just begun initial testing of the Yahoo text ad program. "This is just our first test of the program so the factors impacting when ads appear may change over time as we continue to learn from the test."

Asked whether eBay has done any filtering to ensure that inappropriate ads do not appear on eBay.com, England said, "We do have some control over what is displayed, and how this works is also part of what we are testing." When asked whether Yahoo Search Marketing advertisers would be allowed to dictate whether their paid ads appear (or refrain from appearing) on eBay.com, she referred AuctionBytes to Yahoo, which could "address all the options of their programs and any follow-up questions you might have in that area."

Sellers discussing the ads on the eBay PowerSeller board (access is limited to eBay PowerSellers) and industry boards, such as this one (http://www.vendio.com/mesg/read.html?num=2&thread=644492), expressed concern that eBay "is sending people off eBay."

Cobb said in his May announcement that eBay would not place ads on View Item pages. And in an interview with AuctionBytes in June, eBay's Chris Tsakalakis said there were no plans to add Yahoo ads in seller's eBay Stores. He said the Yahoo contextual ads would focus on null search results.

After the announcement in May, eBay's England had told AuctionBytes that the increased traffic and exposure eBay would get on Yahoo pages through the partnership between the two companies would benefit eBay sellers tremendously. (See AuctionBytes May 25th blog entry and comments: http://digbig.com/4htfn.)

Yesterday, England said, "We believe our partnership with Yahoo will enhance the experience for shoppers on the site and that this could result in an incremental increase in traffic and activity, which of course, would be great for sellers as well as buyers."

eBay's testing of Yahoo ads come on the same day Yahoo announced it would delay its new improved advertising system by three months (http://news.independent.co.uk/business/news/article1185390.ece). eBay announces its earnings Wednesday afternoon.