Ebay at the crossroads (part 3)
The last post looked at the recommendation algorithm side of how Ebay could increase its share of all purchases. This post will look at the other key way in which they could do it – viral exposure.
One of the most striking symptoms of Ebay’s strategy is its apparent passiveness. I suppose that this is a feature of its lack of a serious competitor, but it is still striking. In order for it to get revenue, it relies on people deciding to buy something, then deciding that they might buy it on Ebay, and then looking for it. Its marketing only encourages this process – it does nothing to try to gain a greater share of all sales and purchases.
One of the key components of today’s internet is the ease with which sites can be incorporated into each other. There is no greater example of this than Netvibes or Pageflakes – web aggregators that allow you to put RSS feeds alongside modules of other sites to give you your own personalised web dashboard. Sitting next to a feed of the news stories you are interested in, you can see (at a glance) your webmail accounts and your facebook account too. To the uninitiated, these modules are called widgets.
Widgets go beyond RSS feeds – they are small graphical modules that can be incorporated into any website very easily, and their look is controlled by the source website. For an example, see my Amazon book store, above. That is a widget – a potted version of another site, with limited functionality, that acts as a summary of what that site has to offer and a way of getting through to that site. They are very, very easy to create and, because they give information about the benefits of the source site, they drive more (and better quality) traffic. Ebay has some widgets – it allows Netvibes users to manage their accounts through modules. But it doesn’t appear to have any widgets that go beyond servicing, and it is missing out on the opportunities that widgets provide for driving more business.
Consider my Amazon book store as an example of this. You will all have heard of Amazon, and you probably shop there for some of your book (etc) purchases. Amazon recommends things to you every time you view something (and stores your purchases and views to recommend possibilities to you when you first enter the site). It is very good at doing this, so why would it want to let me put a widget on my website and pay me commission for anything that gets bought through it?
Because of the power of my recommendation. This site is very specific about what it covers, so it will attract a particular interest group. I probably mention some books in my posts anyway, so why not let me link to them and get the sale right away? Sites that are general will probably not have their widgets explored so deeply (oo-er missus), but even if they do Amazon might get a sale that it wouldn’t otherwise have had - so it works as a system. It is in essence a very open-ended form of affiliate marketing.
Imagine a site about rock tumbling. If you don’t believe me that there are sites about such things then look here and be pleasantly surprised. This site actually has a trading area. It doesn’t seem to be doing much trade. But imagine if Ebay could take some of this trade by creating a little widget that this site could incorporate, which would contain the latest items for this interest group and an easy listing function for sellers to use too. Not only would they earn something, but they might find that the market in tumbled rocks actually grows. Ebay wins, rocktumblinghobby.com wins and rock tumblers everywhere win. Bear in mind that Ebay has incurred as good as zero cost in doing this. Now multiply that by every hobby site on the internet and it becomes apparent how much potential there is for Ebay to gain exposure. Not only more listings but more sales. Perhaps it could pay a commission to the widget holder, in the way that Amazon pays me, for each listing and/or sale that arises.
Very quickly there could be millions of little Ebay marketplaces sat in front of people who are interested in the items in that marketplace. Only then would Ebay be able to increase its share of overall sales.