What eBay Lost

2016 06 03 um 13 54 26

Devin Wenig, eBay CEO since July of 2015, talked about eBay vs. Amazon at the Recode conference:

It’s all about perception, Wenig said onstage at the Code Conference, and eBay isn’t just an auction site anymore. But it’s also not trying to be Amazon.

“That’s why we sell $90 billion worth of stuff a year,” Wenig said. “I think there’s an idea that I need to be like Amazon. I don’t. The world doesn’t need an almost-as-good Amazon. They need a better eBay.”

“I’d rather have a billion unique items that arrive in three days than a billion commodity items that arrive in an hour,” he said. “That’s our business and that’s why we’re unique.”

There is some truth to that but he stops half way to the destination.

At eBay’s core is not a selection of a billion unique items. That’s the effect, not the cause. At eBays core is a peer to peer (P2P) model.

eBay was the first company to successfully leverage the power of direct P2P connections. (Google was the second one.)

Looking through this lens, the acquisitions of PayPal and Skype made perfect sense. eBay just didn’t know what to do with them. (PayPal’s vertical integration into eBay was not only the main reason for buying it but also kind of a no-brainer. PayPal is big today, but it never fully realized its potential under eBay. Let’s not talk about Skype.)

Some time over the last decade, eBay forgot what the company made big and special. This is a shame because there are now at least two very big companies that are doing something where eBay should either be an investor or a competitor in the same space they are in:

Uber and AirBnB.

Imagine a P2P juggernaut called eBay, having its hands in anything that uses networks to fundamentally change existing markets.

Think of an eBay building a P2P infrastructure. An eBay acting like a sort of AWS for the “sharing economy”.

Instead, eBay went after brick-and-mortar retail, trying to be a partner for the shrinking ones, and let its marketplace even fall behind Amazon’s marketplace in the US.

Given all this, if anything the current buzzword Wenig should be going after in his interviews is hence not AI but the blockchain.

One comment

  1. […] ​This part of eBays multi-year long plan is very much an inward looking one. It is about improving what eBay has. It is about increasing the value existing participators get out of eBay. Nothing wrong with that. But this is not the way significant growth lies. It is strange that eBay seems to see this as the company’s bold move into the future. (See also the eBay CEO talking about AI in interviews.) […]

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