When people talk about the commerce segment of the Internet, there are three names that are almost always dropped: Google, Amazon and Ebay. I'm not sure why Yahoo! doesn't make it in the mix everytime, because its perhaps the most versatile and resilient of the major players in the space. But let's stick with the first three I mentioned to make a point: Google and Amazon have found ways to co-opt the Web to drive their businesses. Specifically, they both offer a model of radical federation by which their services become desireable as ubiquitous building blocks for content providers. This was driven home for me by Adsense. Mostly because I wanted to play around with Adsense, I added it to my blog (Blogger makes this trivial). The first day I noticed I made thirty cents on click-throughs on ads. Now I'm not about to retire off of Adsense, but it serves to illustrate why people stick those Google ads in their blogs: they want a small piece of a very large revenue stream. And if their traffic really picks up, that small piece can be significant, even to a business: its damned hard to sell advertisers on a small Web site. And Google gets driven through the stratosphere by the effects of all this attention. Very nice.
There's something similar happening with Amazon: its trivial now to add a click-through link to a product from any Web site. At least I think its trivial: I'm going to try to experiment with a link to buy my last book. Again, mostly I want to experiment with the Amazon model, but, hey, I can always use a way to help fund my Starbucks habit. And of course while this might help me a little, if lots and lots of Web content providers do the same, its immensely helpful to Amazon. Neat way to grow the business.
All of this brings me to my point: EBay is different. They haven't yet figured out how to achieve radical federation of their services. The thing that bothers me is I don't understand why. It could be with auctions: there's definitely a market for niche auctions that require tighter administration than Ebay can provide. And their are lots of things that EBay won't do for liability reasons. Fine, but that shouldn't stop them from trying for a piece of the action. A couple of good examples.
Wine auctions. Wine sales are huge and Internet wine sales are growing precipitously. There are already wine auction sites. But EBay is missing out on the action. Not good.
Firearms. Whatever you think about guns, its clear that many Americans love their guns and to collectors -- and some hunters -- trading guns is practically a lifestyle. More to the point: its not cheap. Case in point, a single British shotgun can run into the 6 figures. Don't believe me? Check into the costs of a fully engraved Purdy or Holland and Holland. All that trading means an indirect revenue opportunity for an Ebay. As every software ISV knows, indirect revenue is one key to a high margin business.
And its not just auctions. Ebay could drive the next wave of growth on PayPal as the currency of the Web. Or Skype, which remains for now the technical leader in the Internet telephony race. Either could be massively federated as a service that gets sucked into a critical mass of Web sites. The key may not be to drive those technologies into the Ebay auction user base, perhaps its to drive the auction user base into one of those technologies as the next driver.
Don't get me wrong: I love Ebay. I think its a fantastic company with a great service. I use it to find all kinds of things from fishing rods to clothing. But I'm frustrated as hell that they haven't picked up on the fact that radical federation is the key to driving the next wave of growth in the Internet commerce segment. That's what it means to make a "platform play" in the software-as-a-service space: Amazon and Google are moving there aggressively and its a powerful thing indeed.
2 comments:
I agree, and all it will take is someone with enough community backing to produce a "good enough" core auction infrastructure and just give it away, to rock ebay. Specifically, I'm thinking about Amazon: alright, it may not be their intent, but some of the services they now offer have a flavour of auctioneering to them and they have the experience to bring this to the masses in such a way that it can be used by others, maybe even for full-blown auctions. OK, they may not give it away as in the OSS model, but all they'd have to do would be to allow other users to tie into it and use it; in fact, that's probably a better model because they could then sell it on the trusted-third-party basis: "you already trust Amazon, so trust us to back your auctions". Combine this with a micro-payment approach and it could be a nice little earner for them :-)
I get the basic idea but I am trying to understand if you have specific use-cases in mind. Are you suggesting that Ebay create a 3Bubbles equivalent of IM? (3Bubbles lets you do ad-hoc IM sessions in the context of a blog you are reading with other readers. So a 3Bubbles equivalent of Ebay would let you buy and sell certain goods in the context of a site/blog/wiki).
BTW, PatTextMe is a nice (although expected) take on the PayPal model. I have some details on my Blog.
Post a Comment