Wednesday, October 22, 2008

In A Perfect World - eBay and Amazon

In A Perfect World:
  • eBay would spin off PayPal.
  • eBay would sell Skype and hopefully make a little money on the deal.
  • eBay would sell their marketplace business, including StubHub and the classified businesses to Amazon. 
  • As part of the deal with Amazon, PayPal would be included in Amazon Payments. 
The two corporate cultures are very different, but I can't help thinking that eBay needs a dose of Amazon management to get out of this funk. By default this move would create eBay Classic and get rid of Amazon Jr.

Why would eBay do this? 
  • They can't seem to fix the problems with the marketplace and they aren't willing to listen to alternatives to their plan. This deal takes the marketplace headaches away and lets them concentrate on PayPal.
  • Adding PayPal to Amazon Payments and then making Amazon payments the default checkout on eBay, keeps PayPal part of the eBay revenue stream and adds another 80 million accounts with Amazon payments.
  • Having PayPal as a stand alone company will help them defend against regulations coming down the pike.
  • What other options do they have?
Why would Amazon do this?
  • Amazon gets a profit machine in and growth in the classifieds business.
  • Amazon is having trouble expanding the categories they offer because of requirements for UPC codes and structured data. eBay can take that load off them.
  • Amazon can be the fixed price marketplace and eBay can be what it has always been; an auction site with hard to find items.
  • Amazon can expand their FBA and Webstore programs.
Sure, there are a ton of elements that I'm missing and I'm not even going into why investors would want to see this, but it could happen -- In a Perfect World.

Just my 15%


Ankur said...

Randy -- I love you blog, but you're missing the point on a few items.

Amazon and eBay are culturally like oil and water -- it won't work -- it just won't.

Also, Amazon is about innovation, not just making a buck. The classifieds and the payment play would only be interesting if and only Amazon can do something innovative with those businesses.

Also -- codebase -- eBay's is clunky -- very clunky. Their software development method is from the 1980's -- waterfall -- who the hell does waterfall anymore? Amazon won't tolerate that for one minute.

Randy Smythe said...


I know it was wishful thinking from a sellers perspective. In my perfect world. Amazon would take over eBay and run it like they run Amazon, but I know that is a pipe dream.

Anonymous said...

It is actually possible if not easy to mix oil and water. It takes energy is all.

Anyway that's irrelevent. What eBay needs is a bloody good kicking in the nads.

What the current management have done should be considered a crime against humanity, eBay used to provide a valuable service. Now they are just money grabbing scum.

It's cheaper to go back to the old ways of sticking stuff in local classified ads or specialist second hand re-sellers now (e.g. KEH).

Z. (On ebay since 1998 with 100% good fb as buyer and seller.)