No-one can ignore the power of Google. Undeniably it has built a brand that draws huge advertising dollars. Not dissimilar from Yahoo five years ago. Unlike Ray Lane (who we recently pitched to with a marketplace investment) we don’t believe Google will be the player that takes all.
Google is a place where you find things (among many things you don’t want), and eBay is a place where you know what you want and trade it. Google CEO Eric Schmidt left a little more room for eBay than Ray Lane in a recent interview with Charlie Rose, clearly leaving the door open for both players.
But what is eBay doing? eBay still seems to be getting bigger, but not much smarter. As with any company, staying true to the core of your success as you grow is a challenge. Many temptations lie ahead.
But fundamental to eBay success is the free-market principles. Offer virtually unlimited supply without arbitration to a Long Tail demand, and reap the transaction commission benefit. What does the $620M acquisition of Shopping.com add to that proposition? eBay’s opportunity is to develop new trade verticals (consumer, prosumer, and professional). Historically, demi-cartels limit the supply and open those up with the existing transaction engine, and voila.
Google is a technology company relying heavily on technology innovation to sustain growth. eBay markets to users who are not necessarily technologists, and it should act as a market influencer opening up constricted markets with modified versions of its existing technology.
