eBay Inc. didn't take kindly to Google Inc. crashing its conference.

The online auction house pulled its ads from Google's U.S. search engine last week because it was mad about Google encroaching on its turf — both literally and figuratively.

eBay is one of Google's biggest advertisers and receives millions of Web surfers from the search engine. But the two companies have grown increasingly competitive as Google has stepped up promotion of its Checkout online payment program, which targets a market similar to eBay's PayPal service.

What peeved eBay enough to yank its ads? A party.

Google invited attendees of eBay's big sellers conference in Boston to come to a shindig last week, scheduled to start shortly after eBay CEO Meg Whitman's welcoming address. Google offered trolley service to bring conference-goers to its "Let Freedom Ring" event at the historic Old South Meeting House — to rally against eBay's refusal to let sellers advertise in their listings that they accept Checkout payments.

"When we heard of their plans to have their party and the way they were marketing it, we were disappointed," said Hani Durzy, a spokesman for San Jose, Calif.-based eBay. "We felt that wasn't an appropriate way for one partner to act toward another."

Durzy wouldn't say whether the decision to shift ad spending away from Mountain View, Calif.-based Google was related to the party, saying only that eBay often "experiments" with its ad spending to gauge its effectiveness at driving more visitors to its site.

But analysts say there's a direct connection. One, Deutsche Bank analyst Jeetil Patel, called eBay's move "truly retaliatory." Another, Martin Pyykkonen at Global Crown Capital, called it a "soap opera."

Google eventually backed down and canceled the party. "eBay Live attendees have plenty of activities to keep them busy this week in Boston, and we did not want to detract from that activity," a Google executive wrote on the company's blog.

But the spat may carry financial consequences for both companies.

Patel estimated that eBay gets 10 percent to 20 percent of its Web traffic from Google, particularly by buying ads to run when Google users type in certain search queries. Google users saw more ads from eBay than from any other company in the first quarter, according to Nielsen/ NetRatings.

Meanwhile, analysts say, Google receives tens of millions of dollars a year in advertising revenue from eBay. The two also have a partnership to share revenue from advertising on eBay's auction sites outside the U.S.

The source of tension is their competing online payment businesses. eBay owns PayPal, which conducts close to 80 percent of all online transactions in the U.S., according to Pyykkonen. eBay last year generated $1.4 billion, about 23 percent of its revenue, from PayPal transaction fees. Google Checkout, on the other hand, launched just a year ago and is working to gain a foothold.

Greg Sterling, principal at Sterling Market Intelligence, said Google and some of eBay's own sellers have lobbied eBay to add its Checkout service to its auction sites.

Meanwhile, analysts expect eBay's boycott of Google to be short-lived.

"I just don't see that eBay can sustain it for very long," Pyykkonen said. "The reality is that eBay is too dependent on search to bring traffic to their site, and Google is the No. 1 player in search. ... They may have a few more angry words, but at some point, they'll start doing business again."