Ebay at the crossroads
Ebay has had a lot of coverage recently, prompted by the $1.4bn impairment write-down that it has had to take against its purchase of Skype. This has also brought questions about what its strategy is at the moment. I believe that ebay is at a crossroads. It has been a great company, and what it does now can move it forwards and make it a great company again. It could also act in a way that just makes it lose focus and move sideways. The worst of the outcomes is if it sits back and admires itself, in which case the decline that it appears to be facing is certain to continue.
Why do I believe this? Ebay has grown phenomenally and has been one of the cornerstones of the growth of the internet. It has also entered into popular culture in a huge way – it is one of the few companies whose name is also a verb (I’ll just ebay it). At the same time, it really doesn’t seem to have changed very much – its front page has been the same for as long as I can remember. It is certainly not the pioneer that it once was, and it has been struggling to maintain its meteoric early growth. Buying Skype has now been officially admitted to have been a lesser act than it was claimed to be. In short, it has all of the characteristics of a company that is drifting a little.
Doing nothing will only take ebay backwards, and losing focus will take it sideways. So I intend, over a few posts, to focus on what I believe will move it forward. This will principally be three things:
- Using the latest of the web to proactively drive more people to buy and sell through:
- Recommendation algorithms
- Viral exposure
- Finding new markets to which it can bring its core strengths
- Potential targets, or partnerships, for it to growth inorganically
The next posts will consider each of these points.