eBay

It is great to see eBay being on the move again and coming out kicking.

During all the time I have been engaged in building, running and analyzing two-sided marketplace the original online person-to-person listing / biding model of eBay has always been my favorite. Its additional network effect of buyers becoming sellers and vise versa adds to the fun figuring out the ecosystem.

eBay doesn’t take possession of either the seller’s good or the buyer’s payment. Not having inventory or liability is always a good thing in my books compared say to the single-sided marketplace that makes up the retail business of Amazon.

A person-to-person listing intermediary always has the challenge to create trust between participants in its service. eBay’s feedback system is unique in that transactions create a history of trades for each participant. The trading profiles thus aggregated create a form of reputation and allow evaluating the trustworthiness of actors.

eBay’s challenge in competing with more traditional marketplaces has always been its overwhelming product universe caused by the uniqueness of  each of its product listings. Finding a product requires expert effort in form of searching, refining and scanning the many listings – maybe the new Cassini Search Engine will address this problem.

eBay has been a market transparency engine for unique or used goods. Its database of transactions is a tremendous asset that allows putting a price tag on everything. A good example is eBay Motors and its ability to create transparency in a market that is controlled by Kelly’s Blue Book and its valuation of used cars by insider auctions. The price setting power of online person-to-person transaction is a tremendous asset for the web.

Part of the current success of eBay has been its ventures into the non-auction shopping market targeting Amazon’s marketplace.  Hopefully this doesn’t deemphasize the investment into its market transparency engine.

It should not, since it is its unique advantage in the heated battle of two-sided commerce marketplaces that is brewing between Google, Amazon and Facebook:

  • Amazon – “database of consumer transactions” with its rich customer purchase history,
  • Facebook – “database of connections” with its rich user profile and interest data,
  • Google – “database of search purchase intent” with its last click advantage,
  • eBay – “database of  person-to-person transactions” with its pricing setting power.