Web 3.0 & eBay (Part 2)

Vertical Strategy

eBay is the most popular auction site in the world. It also operates the hugely popular online payment software PayPal and VoIP tool Skype. We will take a look at the Company’s various businesses below.

Marketplace
eBay.com is still #1 in auctions, after years of competition trying to chip away at its game. eBay includes traditional auction format, fixed price format and eBay Stores. The Company offers the core platform on localized sites in 24 countries. The core platform allows traditional auction format listings, in which a seller can select a minimum price for opening bids, with the option to set a reserve price for the item, which is the minimum price at which the seller is willing to sell the item.

Half.com provides a fixed price, person-to person e-commerce tool that allows people to buy and sell previously owned books, movies, music and games at discounted prices. StubHub is the largest ticket marketplace in the world, based on sales. The site enables fans to buy and sell tickets at fair market value to a vast selection of sporting, concert, theater and other live entertainment events, even those that are “sold out”. The Company’s unique open marketplace, dedicated solely to tickets, provides all fans the choice to buy or sell their tickets in a safe, convenient, and highly reliable environment.

eBay Stores enables sellers to show all of their listings and to describe their respective businesses through customized pages. eBay Stores provide useful tools for sellers to build, manage, promote, and track their business. “Store Inventory Format” listings allow sellers to list items at a lower insertion fee and higher final value fee than regular auction and fixed price listings, for a minimum 30-day listing duration.

ProStores, an eBay Company, enables small and medium-sized businesses to sell products and services online through a completely customizable virtual storefront at their own Internet domain. The ProStores product is based on StoreSense, an award-winning e-commerce software.

One of the key issues eBay is battling today is a slowdown in its core auctions business. In 2005, when the slowdown trend was first being felt, eBay made a rather desperate and highly controversial diversification move by acquiring Skype, a move that has since been vehemently criticized by me and others.

Comparison Shopping
Shopping.com is a comparison shopping site that allows shoppers to compare millions of products from thousands of stores and helps merchants increase their sales. Shopping.com offers one of the largest product catalogs on the Internet – searchable by thousands of attributes – along with a consumer review service through Epinions.com, which helps users make informed buying decisions.

eBay Express is a specialty site within the eBay Marketplaces designed to help shoppers find and buy the eBay deals they love, quickly. Consumers can check out fast without any waiting, buy every item immediately from experienced merchants. No auctions, just convenient, hassle-free shopping.

In the era of Web 2.0, Vertical Search has evolved to be a core entry point into the web, and comparison shopping within verticals has been a ripe area for innovations. My earlier reviews of sites like Retrevo, Wize, thefind, etc. are good examples in the evolution of the genre. You can look them up here:
* TheFind: Lifestyle Shopping
* Wize Up On What To Buy
* Retrevo’s Vipin Jain on Vertical Search

Payment
PayPal enables any individual or business with an email address to securely, easily and quickly send and receive payments online. PayPal makes online commerce more efficient compared to traditional payment methods such as checks, money orders, and credit cards via merchant accounts, and makes its money off transaction fees.

PayPal offers online merchants an all-in-one payment processing solution that is less expensive than most merchant accounts, offers industry-leading fraud prevention, and enables merchants to conduct business with approximately 133 million PayPal customer accounts in over 100 markets. PayPal also offers merchants the ability to maintain a direct relationship with their customers. This part of eBay’s business continues to show strong growth, and is a mainstay in eBay’s longer term strategy.

Real Estate
Rent.com is a leading U.S. Internet listing site in the apartment and rental housing industry. The site is designed as a more effective means of bringing apartments seekers and apartment managers together.

Classifieds
eBay’s classifieds websites are available in hundreds of cities and regions around the world and are designed to help people meet, share ideas and trade on a local level. Our classifieds websites include the newly launched Kijiji, Gumtree.com, LoQUo.com, Intoko, Marktplaats.nl and mobile.de. In addition, the Company has a minority equity investment in Craigslist, Inc., which operates the Craigslist classifieds websites around the world, but overall, is a competitor to eBay due to its largely free, non-profit outlook.

Others
The Company also operates StumbleUpon, a discovery engine that allows users to discover new sites based on their personal interests and preferences. MicroPlace is currently the only broker-dealer specializing in micro finance securities for retail investors. Started by Tracey Pettengill Turner, MicroPlace was bought out by eBay Inc. in 2006.

Gaps in eBay’s Portfolio
eBay is primarily focused on developing communities around its e-commerce sites and tools. The Company is one of the leading spenders on online advertisement and is Google’s top client. It should look at acquiring various vertical search engines and communities in auto, real estate, comparison shopping, vertical search, etc. to reduce its dependence on Google for customer acquisition, as Google makes its way into e-commerce in the foreseeable future.

(To Be Continued)

[Part 1]

This segment is part 2 in the series : Web 3.0 & eBay
1 2 3 4 5