From this post from Silicon Alley Insider:
eBay’s stock is dead in the water, and its two key constituencies–buyers and sellers–are pissed. Here’s our Four Plan Plan to fix the place
(from: Fixing eBay: Our Four Step Plan)
I think eBay is following the “AOL pattern”.
AOL helped millions of users get on-line. But as the Internet got more sophisticated, the users realized that the Internet was a lot more interesting than AOL. So they began to find other ways to get on-line.
Similarly, eBay as helped small business entrepreneurs get started selling on-line. But as Internet eCommerce tools have advanced, those entrepreneurs can easily host their own stores, complete with shopping carts and payment. In other words, they can bypass eBay and sell directly to customers.
Ebay’s situation is not as far along, of course, as AOL’s is. But it seems to be trending in that direction.
in addition to the tools & state of the small seller market advancing (and ebay not), the other point is that CPC & CPA advertising are enabling sellers to bring the market to them, instead of having to pay monopolist tolls & fees to be “on” the ebay marketplace.
however, it didn’t really need to be this way… in many areas that include PayPal & Skype & others, eBay has purchased innovation that could be applied to more of its business. unfortunately (for them) the internal innovation hasn’t developed as quickly as offerings from the rest of the market.
[disclaimer: i used to work at PayPal from 2001 to 2004.]
Thanks for the comment.
Your point about CPC/CPA advertising suggests another dimension to the AOL/eBay analogy.
AOL *could* have been the Yahoo or Google of the Internet, morphing from being a content provider to a directory/search service to locate non-AOL content.
Similarly, eBay could become the master index or directory of goods for sale, landing traffic on merchant sites to complete the transaction. They would shift from a transaction-based model to a CPA/CPC model. Given eBay’s brand, they probably have the best chance of pulling this off than anyone.