eBay Calls on Google

"This announcement continues to show, in our opinion, that Google continues to grow not only through rapid innovation and product introduction, but also through creative partnerships with some of the most trafficked properties on the Internet,'' writes Oppenheimer & Co. analyst Sasa Zorovich, in a note to clients. Zorovich, who reiterated his buy rating on Google's shares and his $540 price target, doesn't expect the agreement to have a material impact on Google's bottom line either this year or next year.

The deal comes as eBay struggles to show investors it can find new growth opportunities as its core auction business begins to slow. Shares are off 40% this year following a series of earnings disappointments. This spring, eBay signed a deal covering domestic ads with Yahoo! (YHOO Quote).

Meanwhile, Google has also signed a series of deals with partners ranging from Dell (DELL Quote) to Adobe (ADBE Quote) in a bid to make its software toolbar even more ubiquitous.

eBay said it doesn't expect the deal to affect its financials for the next two years.

Google also took another shot at Microsoft(MSFT Quote) with Google Aps for Domains, a feature that offers companies and other organizations free services such as email, IM and calendar.

This is just another example of how Google is trying to better Microsoft just as the world's largest software company is trying to gain a bigger foothold in search.