Web 3.0 & eBay (Part 3)

Vertical Strategy & Web 3.0 Framework discussion

eBay being an auction site operates in various verticals. Some of the key verticals in which eBay operates are Auto, Real Estate, Apparel, Jewelry, Art, Books, CDs, Consumer Electronics, Photography, etc. eBay has some very good community and e-commerce features, but also lacks some rather vital ones. It’s Vertical Search Engines are starting to move in the right direction, but navigation still needs a lot of cleaning up. The overall look and feel of the site has been very “dirty”, and it is amazing that a company as old as eBay never addressed that. Recently they are testing more web 2.0-esque interface tools.

Auto
eBay Motors is the leading automotive site and in June 2007 it attracted over 14.65 million visitors. According to Hitwise, eBay Motors’ market share is 14.41% in the shopping category. eBay Motors lets users buy or sell new and used cars, trucks, and SUV passenger vehicles online. The site is very well organized under various categories like cars, trucks, parts, motorcycles, etc., making searching and navigation easy. eBay Motors has a very good vertical search engine and allows users to choose Context (Buy, Sell) very early on. An important Context in Car Buying today, however, is Research, and the problem with eBay’s thought process is evident in the fact that it doesn’t understand or appreciate the user’s complete needs. As a result, a user ends up having to do all the research elsewhere, before coming to eBay to do the actual buying.

In terms of Community, also, the element they capture well is “Reputation” of Buyers and Sellers (although there is a question mark about the authenticity of the feedback since retaliatory feedback is not prevented in any way. However, reviews, ratings, etc. via web crawling or internal generation (as we have discussed extensively in the reviews of WIZE and Retrevo), are missing. Thus, they miss out on valuable UGC opportunities. I would also like to see the catalog in their Auto section to have a lot more information.

Real Estate
Rent.com with 2.75% of the market share is the fourth largest real estate site in the US. The site is designed as a more effective means of bringing apartments seekers and apartment managers together. Rent.com also has a very good vertical search engine. However, it is far from a web 3.0 experience, and has much room for improvement.

Art, Crafts & Antiques
eBay is a major destination for buyers and sellers of arts, crafts and antiques. The community feature plays an important role in this segment. Collectibles are also a very important category, since that was part of the genesis of eBay. Pottery and Glass items are also popular.

Lifestyle Shopping
eBay is among the top e-commerce sites for Apparel, Accessories, Jewelry, Shoes and other lifestyle items. eBay along with eBay Express, Prostores, Half.com and Shopping.com covers both budgeted as well popular brands. Most of the business, however, is C-to-C, and in-season merchandise by top brands is almost never sold on eBay due to fears of brand dilution. Consumers, however, often, trade Gucci and Armani, especially used items. Small businesses also sell lifestyle products on eBay, although not the branded luxury products.

In general, the web 3.0 experience in the Lifestyle shopping category is better demonstrated by sites like thefind, BlueNile, Zappos, FigLeaves, etc.

Consumer Electronics
Consumer electronic products like mobile phones, iPods, LCD and Plasma television sets, DVD players, music systems, etc. are widely bought and sold through the eBay site. Cell Phones and PDAs are very popular. The eBay site allows users to get a good bargain for their used consumer electronics, which otherwise would have become worthless or would have been sold as scrap. eBay is also a good channel for small retailers selling new merchandise. I much prefer WIZE or Retrevo to shop for Consumer Electronics, though, since they facilitate the Research piece much better, and eBay’s web 3.0 strategy could well be to buy some of these compelling entry points to the category.

Photography products
eBay sells Cameras & Photos has digital cameras, SLR cameras, 35MM cameras, camcorders, memory cards, camera equipment & accessories. The vertical lists thousands of products from across the globe, and has been one of the most popular. Again, I prefer shopping through WIZE and Retrevo for photography products as well for the same reason as above.

Books/DVD/CD/media products
Books, VCDs, DVDs are very popular on eBay. Users can find thousands of movie videos, music cds, books, etc. for cheap. There are also box sets of music and movies. For the entertainment freaks there is a host of entertainment memorabilia.

Tickets
With the acquisition of StubHub, eBay has become a key player in the ticketing industry. StumbleUpon 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.

Classifieds
The Company launched Kijiji in the U.S. to more than 200 cities at the end of June. After just three months, there are more than 100,000 live ads available at any time. eBay is focusing on classifieds as a growth driver. While it’s still relatively small, it is showing some promise. It also owns 25% of the popular classifieds site Craiglist, although Craigslist is, by and large, a non-profit.

Other important verticals in the eBay portfolio are Computers & Networking, Dolls & Bears, Travel, Health & Beauty, Musical Instruments, Toys & Hobbies, Business & Industrial, etc.

Gaps in the portfolio
eBay’s future acquisitions should be targeted at acquiring some of the vertical search engines we discussed to strengthen its web 3.0 experience.

Overall Web 3.0 Framework discussion

Context
Context, in some eBay verticals are captured well and early, especially Motors. However, many important Contexts are missing, Pre-Sales Research being a key one, which is important for many categories.

Content
eBay has approximately 102 million listings worldwide, and approximately 6 million listings are added per day. eBay users trade in more than 50,000 categories. You name it and the product is available on eBay. eBay introduced Snapshot View, which gives buyers a better way to visually browse through the items that they have found on eBay.

The weakness in Content is the missing UGC link – reviews, ratings, user conversations around specific items, etc. Shopping.com has extensive product reviews and ratings from the Epinions community, but the experience is still nowhere as compelling as the new generation of Vertical Search and Comparison Shopping engines we’re starting to see.

Commerce
eBay is one of the major players in the e-commerce industry. The eBay site earns revenues from fees its charges to its Buyers and Sellers. The fees are a combination of Insertion Fee, Final Value Fee (generally believed to be quite high), and in some cases transaction fee.

Community
The cornerstone of eBay’s Community feature is Buyer/Seller feedback that builds reputation over a long time. I never buy from Seller’s who have poor feedback. However, there are question marks around whether people are leaving authentic feedback or just scratching each other’s back to collect positive feedback.

Apart from Discussion Boards, Groups, Personal Pages, Answer Center, Chat Rooms, and Reviews & Guides, eBay recently added eBay Community Wiki and eBay Blogs to its Community. eBay has a robust mobile offering, including SMS alerts, a WAP site, and J2ME clients, available in certain markets. eBay recently launched eBay Neighborhoods, which allows its community members to connect through commerce.

Just to clarify, the Reviews section that eBay has launched is not well-integrated to where the products are showcased or listed, offering a fragmented user experience. They really need to pay a great deal of attention to the integrated Web 3.0 experience that I have been championing, and it frustrates me enormously that they still miss a lot of it.

Personalization
My eBay allows users to track up to 10 items, save up to 10 searches, receive emails whenever new favorite items appear, etc. The launch of the new home pages in the U.S. and Germany offer buyers and sellers a simpler, and more personalized front door to eBay. Innovative features like My eBay at a Glance and Recently Viewed gives users a snapshot of the most relevant information about their trading activity right on the home page. Nonetheless, eBay doesn’t know “me” really, in the sense that Amazon does, and thus, misses out hugely in making the site sticky over the longer term.

Vertical Search
eBay has a good search engine and allows users to search by category, title, description, time, etc. Shopping.com has the world’s largest product catalog – searchable by thousands of attributes. eBay recently introduced Best Match, which uses an intelligent search and discovery technology to serve more relevant items to shoppers. The gap still is in eBay’s appreciation that the level of innovation happening outside its rather complacent walls, especially in vertical search and comparison shopping.

Business Model
eBay generates revenue from a number of fees. There are fees to list a product and fees when the product sells, plus several optional fees, all based on various factors and scales. In addition, eBay now owns the PayPal payment system, which has commission fees of its own. Skype’s charges are as low as US$0.024 per minute for most developed countries, and as high as US$2.142 per minute for calls to the dependency of Diego Garcia. It also earns revenues from advertisements posted on its site, although the advertising revenue model should have been introduced long, long back, and eBay failed to see the opportunity until recently.

(To Be Continued)

[Part 1] [Part 2]

This segment is part 3 in the series : Web 3.0 & eBay
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