Tag Archives: EBay

Web 2.0 Ain’t About the Technology

Scoble makes some good points in a blog posting about why Microsoft, and more specifically his old boss Steve Ballmer, doesn’t get Web 2.0. I don’t agree with everything Robert says, but he has an understanding of this era of the web born of living and working in its eye the past seven years:

“There can’t be any more deep technology in Facebook than what dozens of people could write in a couple of years. That’s for sure,” Ballmer said.

When I worked at Microsoft I heard this over and over and over again from various engineers and program managers who STILL haven’t competed effectively with WordPress, Flickr, Skype, YouTube, or any of the other things over the years I’ve heard this “we can build that in a few weeks” kind of arrogant attitude attached to.

Why aren’t they succeeding? Because eBay is NOT about the technology. It’s about the community and unless you have something that’ll convince the buyers and sellers all to switch all at one moment you’ll never be able to take eBay’s market away. Translation: it’s too late and eBay has huge defensibility around its business because people won’t move away from it even if you demonstrate 5x better technology.

I think Scoble fuses two different phenomena here, but the point is a valid one. But a marketplace is not quite the same as a community. eBay is not really about the community, it’s about the marketplace. As anyone who has tried to move a physical market — a wet market, say — from one location to another has found, it’s not easy. eBay (and Amazon) are about first mover advantage. If you want to sell or buy something, you go to the place most likely to sell it.

Facebook et al are different. They’re definitely about community. But community is maybe the wrong word, because it carries with it connotations of permanence that don’t really exist. MySpace, Facebook etc may still be as big in a few years’ time, but somehow I doubt it. They’re social spaces that open and close like real spaces — less communities, more campsites. Campsites may be there for years, but the structures are impermanent and can, one day, move or disperse.

I agree with Robert, too, that people who use these services ain’t just kids. That’s the most interesting thing about Facebook, in my view: the Skype-like opening up to less techie, older users because of the untechie attractions of being able to find and communicate with acquaintances and ex-colleagues with whom they share loose ties.

Social networking has broken out of its narrow confines, and this has huge implications. But we should be careful before we assume that this will evolve in the same way social networking has evolved for the geek community: these new users won’t stick around for ever adding apps of less and less consequence and communicating with all their buddies via Facebook.

Eventually, everyone finds everyone they need to find on Facebook and bores of the services designed to keep them there. Then they’ll want to export the address book and the creative capital they’ve invested in Facebook and move it someplace else. If they are blocked from doing that, their interest in such tools will quickly wane. We geeks are happy to populate new social networks by repeating all the data entry necessary to make the sites worthwhile, but non-tech users will be less patient (or actually have lives offline.) For them it’s about the people; the apps are just a pleasant distraction.

Then there’s the money. Robert is right: Facebook is an advertiser’s dream. But it has yet to be proven that Facebook users (and we’re talking non-tech users here) are going to tolerate too much intrusiveness. Gmail has scared a lot of non-tech users away, based on anecdotal evidence, because of its intrusive ads. I think Facebook will similarly scare people away if it mines that user data too deeply.

This all said, it is a puzzle as to why Microsoft has ignored this new world. All its tools beg for greater interactivity and sharing, but why is it I use Microsoft only when I’m typing this (the free Windows Live Writer), or when I’m writing a Word document, or emailing it to someone? If I want to discuss the document, or collaborate on a spreadsheet, I turn to Google Docs. Nowhere does Microsoft try to make that process easier or more social. Think of all the opportunities missed in those simple actions.

Steve Ballmer still doesn’t understand social networking « Scobleizer

Sponsoring Theft

Are companies like eBay knowingly peddling stolen goods? Surely not, but I wonder about their advertising strategy.

I get confused about how sponsored results work. You know, those textual ads that appear alongside search results or on a webpage. I mean, I thought I knew how they worked: someone buys a word and when that word appears they get their ad next to it. But when I look for “laptop stolen” on Yahoo! Answers, I get this:

So what keyword are eBay, DealTime and Shopping.com sponsoring here? Or do they really have good stolen laptops for sale? And if so, wasn’t I told? Or these poor folks, whose tales of woe appear right next to these add:

Interestingly, trying the same search but for “laptop vomit” throws  up no sponsored ads at all. So “stolen” must be a sponsored word? (It does throw up, so to speak, cases of people feeling unwell over their keyboard. I guess that’s the Yahoo! Answers type of crowd. )

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Dud of the Week: eBay Anniversary

I shouldn’t boast too much about this, I know, since you’re all going to get horribly jealous, but I just received a very exciting email, courtesy of the nice folks over at eBay, congratulating me on an impressive year (or is it 10?) of dedicated custom:

Now my friend Jim says this is the lamest bit of spam he’s seen in a long while, and points out that since I haven’t actually sold anything on eBay the sentiments expressed therein are as genuine as the Microsoft Office on his computer, but I think he’s just green with envy. Not least because the email contained a picture of the eBay Green-Pants Wearing Party Dude (pictured below for your convenience):

 I think it’s a great idea to send congratulatory emails to your customers on the anniversaries of their signing up. Everyone could do it – ‘This is Microsoft here, congratulating you on the anniversary of buying Windows 98! Oh, and buy the way we don’t support it anymore, so you’ll have to buy Vista real soon! Have a good one!’ or ‘Hi! It’s your friendly cellphone company here. Congratulations on the 3rd anniversary of using our service! You’ll be pleased to know that with all the hidden fees and ridiculous per-kilobyte charges we tag onto your bill we’ve been able to send all our kids to finishing school in Switzerland! Keep talking and downloading and not looking too closely at your phone bill!’ It might clog our inboxes but it’ll be worth it to feel wanted.

And I think I’m going to make the Green Pants Dude my Dud of the Week emblem. After all he’s already wearing a dunce’s hat.

The Online Dutch Auction

Good piece by my old friend Rani about how online auctions work in Singapore: 

When I tried to sell my xda II online, I was surprised to find out that the logic of online auction is almost totally different in Singapore. At first, I tried to sell my xda II in Singapore Pocket PC user group (PPCSG). However, I can say that, although PPCSG market place forum is a great place to buy stuff, it is not a great place to sell stuff. People from the forum would mercilessly bargain 40-50% from the initial price. Having been unable to sell my xda II with a good price in PPCSG, I looked for other alternatives.

Enter auctions sites, namely, Yahoo Auctions Singapore and ebay Singapore. And I was surprised to find out that… nobody bids on those auctions sites. It was not long until I find out the unwritten rules of the online auction game in Singapore, which is totally different from my experience doing online auction in the US and UK.

Basically it’s like a reverse auction: Put your highest price as the opening bid, and wait for folk to call you with lower bids. Then you just seal the deal over the phone. I wonder how true this is elsewhere? And I wonder, too, whether Rani’s suggestion that eBay and co actually build the capability for reverse auctions into their software, so that in places like Singapore, people actually use their services?

IVR Cheat Sheets, And Dirty Tricks?

The IVR debate rumbles on. Could automated voice phone systems be better than just having a human answering the phone? Is it better to cheat the system? Paul English’s cheat sheet has appeared more than 100 TV and radio stations in a month. One company, Angel.com, has been fighting back, first with a pretty harsh broadside, but now appears to have replaced it (the page redirects) with a more measured ‘IVR Cheat Sheet for Businesses’, figuring, I guess, that if you can’t beat ‘em, join ‘em.

Anyway, I got an interesting take on it this morning as a comment appended to my blog from someone who identified herself as Kate, with a believable-looking email address. ‘She’ wrote:

Paul English makes some great points. I saw his piece on ABC World News Tonight and he’s bringing to light that most companies operating in the IVR space have shoddy systems. In my opinion, Angel.com is one of the few companies in the IVR industry trying to change things, however, with web-based next generation systems that link to CRM systems. Small businesses are finally able to create IVR systems (using a self service model if they wish) that are even more sophisticated than what large industry is using. My Dad uses the system for his online ebay store selling vintage posters and autographed baseballs. He’s able to provide far better customer service using Angel.com’s system than he would ever be able to provide on his own. The boon to small business of using these inexpensive, next generation IVR systems is getting lost in the debate.

That’s one well-written comment. I was impressed (as I imagine, would be Angel.com. Not only can they be linked with the little guy (and who wants to bash the little guy?) but they get to bash some of their competitors too). But not being cynical about the posting, I allowed it through and emailed ‘Kate’ with a request to interview her father. If true, it’s a valid point and one to explore.

What I didn’t expect was for the email to bounce. Not that unusual, especially with comment spam, but not when the given name (‘Kate’) jibes with the email address (‘katerobins@yahoo.com’). Why go to the trouble of putting a believable fake email address, especially when you presumably would be quite happy if someone followed up and got a bit of publicity for your eBay-selling dad? Baffled, I checked the IP address where the comment came from: a Verizon address in Washington DC. Not, coincidentally, that far from Angel.com HQ in McLean, Virginia.

I wish I could say my sleuthing took me further. But I could find no Kate Robins in the phone book, no sign of someone with that Yahoo address on Google, or anyone on eBay who might be her dad (not that surprising; it’s a big place). I’ll keep looking, but if anyone knows Kate Robins, her dad, or could shed any light on this, I’d love to hear from them. I’d hate to think that my blog is being used by anonymous shills to do damage limitation exercises for the IVR/CRM industry. On the other hand, if Kate does exist and just mistyped her email address, I’d love to follow up the angle she suggests.

Tamiflu and the Online Buying Epidemic

Sadly, this might be the way of the future: Selling prescription drugs that everyone wants in the middle of a pandemic to the highest bidder. The Register reports that people have been selling Tamiflu on eBay for up to four times its usual price:

Internet auctioneer eBay has shut down sales through it service of Tamiflu, which can help reduce the severity of avian flu, amid growing concern of a potential pandemic that could kill humans. An eBay spokesperson told The Register that the company had pulled a handful of listings from its UK web site, because the sales contravened eBay’s policy over the sale of controlled substances and prescription drugs.

eBay acted as packets of Tamiflu, which comprise 10 capsules, had reached £104 and attracted 84 bids. Tamiflu is usually available through prescription only, for between £25 and £30.

(I’m not quite sure who to credit for this story: A very similar account appears on ZDNet, quoting Reuters.)

Another story from AFP (via Singapore’s TODAYonline), highlights some of the dangers of this kind of thing. It quotes David Reddy, a senior executive at Tamiflu’s maker, Roche as saying he had heard heard of reports of Internet sales “of a drug that was purported to be Tamiflu but in fact was not.” He declined to give details until the matter had been investigated. A Taiwan newspaper, meanwhile, catalogues a Tamiflu buying frenzy since August.
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Skype, PayPal and eBay

There’s quite a bit that’s interesting in all this Skype/eBay business. I know others have raked over all this before, but now it’s official I’ll weigh in too.

The release is quite informative. It says “Skype, eBay and PayPal will create an unparalleled ecommerce and communications engine for buyers and sellers around the world.” How, exactly?

Well, “Skype will streamline and improve communications between buyers and sellers as it is integrated into the eBay marketplace. Buyers will gain an easy way to talk to sellers quickly and get the information they need to buy, and sellers can more easily build relationships with customers and close sales. As a result, Skype can increase the velocity of trade on eBay, especially in categories that require more involved communications such as used cars, business and industrial equipment, and high-end collectibles.”

That’s straightforward enough. Buyers and sellers can hook up via a SkypeMe button which lets them instant message, or talk to one another, presumably for free. Or does it?

“The acquisition also enables eBay and Skype to pursue entirely new lines of business. For example, in addition to eBay’s current transaction-based fees, ecommerce communications could be monetized on a pay-per-call basis through Skype. Pay-per-call communications opens up new categories of ecommerce, especially for those sectors that depend on a lead-generation model such as personal and business services, travel, new cars, and real estate.” This, I take it, means that beyond merely providing a market-place of sellers and buyers of goods, eBay hopes to become a market-place of services, whether they’re pure consulting, travel agencies, or selling things that require a degree of expertise (cars and real estate are mentioned, but they could as easily be careers.

Then there’s paying for Skype’s services. “PayPal and Skype also make a powerful combination. For example, a PayPal wallet associated with each Skype account could make it much easier for users to pay for Skype fee-based services, adding to the number of PayPal accounts and increasing payment volume.” True: Skype’s payment system is awkward, if not disastrous for many folk living off the beaten track. But PayPal’s isn’t much better. Both services need to get with the program on that, or face the growing wrath of people in the world’s more interesting regions.

I won’t get into the extraordinary cost of buying a company that made only $7 million last year. There’s no question there’s wonderful synergy to be had here. But there’s also the caveat that eBay should not underestimate the other lesson that the Skype revolution has taught us. People were willing to overcome all sorts of technophobia when they realised the enormous cost and social benefits of installing Skype. Now they’ve done so, they will more easily than ever before switch elsewhere if the appeal of Skype diminishes, either because of sneaky advertising, sneaky fees or if the remaining drawbacks of Skype — most particularly, but not exclusively, its payments system — are not tackled quickly.

Ebay to buy Skype: It’s Official

eBay Inc. has agreed to acquire Luxembourg-based Skype Technologies SA, the global Internet communications company, for approximately $2.6 billion in up-front cash and eBay stock, plus potential performance-based consideration.

Here’s the rest of the release:

The acquisition will strengthen eBay’s global marketplace and payments platform, while opening several new lines of business and creating significant new monetization opportunities for the company. The deal also represents a major opportunity for Skype to advance its leadership in Internet voice communications and offer people worldwide new ways to communicate in a global online era. Skype, eBay and PayPal will create an unparalleled ecommerce and communications engine for buyers and sellers around the world.

“Communications is at the heart of ecommerce and community,” said Meg Whitman, President and Chief Executive Officer of eBay. “By combining the two leading ecommerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net.”

“Our vision for Skype has always been to build the world’s largest communications business and revolutionize the ease with which people can communicate through the Internet,” said Niklas Zennström, Skype CEO and co-founder. “We can’t think of any better platform to fulfill this vision to become the voice of the Internet than with eBay and PayPal.”

“We’re great admirers of how eBay and PayPal have simplified global ecommerce and payments,” said Janus Friis, Skype co-founder and senior vice president, strategy. “Together we feel we can really change the way that people communicate, shop and do business online.”

Zennström and Friis will remain in their current positions. Zennström will report to eBay CEO Whitman and join eBay’s senior executive team.

Online shopping depends on a number of factors to function well. Communications, like payments and shipping, is a critical part of this process. Skype will streamline and improve communications between buyers and sellers as it is integrated into the eBay marketplace. Buyers will gain an easy way to talk to sellers quickly and get the information they need to buy, and sellers can more easily build relationships with customers and close sales. As a result, Skype can increase the velocity of trade on eBay, especially in categories that require more involved communications such as used cars, business and industrial equipment, and high-end collectibles.

The acquisition also enables eBay and Skype to pursue entirely new lines of business. For example, in addition to eBay’s current transaction-based fees, ecommerce communications could be monetized on a pay-per-call basis through Skype. Pay-per-call communications opens up new categories of ecommerce, especially for those sectors that depend on a lead-generation model such as personal and business services, travel, new cars, and real estate. eBay’s other shopping websites – Shopping.com, Rent.com, Marktplaats.nl and Kijiji – can also benefit from the integration of Skype.

PayPal and Skype also make a powerful combination. For example, a PayPal wallet associated with each Skype account could make it much easier for users to pay for Skype fee-based services, adding to the number of PayPal accounts and increasing payment volume.

In addition, Skype can help expand the eBay and PayPal global footprint by providing buyers and sellers in emerging ecommerce markets, such as China, India, and Russia, with a more personal way to communicate online. And consumers in markets where eBay currently has a limited presence, such as Japan and Scandinavia, can learn about eBay and PayPal through Skype. Skype can also help streamline cross-border trading and communications.

With its rapidly expanding network of users, the Skype business complements the eBay and PayPal platforms. Each business is self-reinforcing, organically bringing greater returns with each new user or transaction. The three services can also reinforce and accelerate the growth of one another, thereby increasing the value of the combined businesses. Working together, they can create an unparalleled engine for ecommerce and communications around the world.

Transaction and Financial Information

eBay will acquire all of the outstanding shares of privately-held Skype for a total up-front consideration of approximately €2.1 billion, or approximately $2.6 billion, which is comprised of $1.3 billion in cash and the value of 32.4 million shares of eBay stock, which are subject to certain restrictions on resale.

The maximum amount potentially payable under the performance-based earn-out is approximately €1.2 billion, or approximately $1.5 billion, and would be payable in cash or eBay stock, at eBay’s discretion, with an expected payment date in 2008 or 2009. Skype shareholders were offered the choice between several consideration options for their shares. Shareholders representing approximately 40% of the Skype shares chose to receive a single payment in cash and eBay stock at the close of the transaction. Shareholders representing the remaining 60% of the Skype shares chose to receive a reduced up-front payment in cash and eBay stock at the close plus potential future earn-out payments which are based on performance-based goals for active users, gross profit and revenue.

The above-mentioned dollar and eBay share amounts are approximate, based on the Euro-Dollar exchange rate and eBay’s stock price as of September 9, 2005. The final value of the stock component of the consideration may vary significantly from this estimate based on the value of eBay stock at closing.

Skype generated approximately $7 million in revenues in 2004, and the company anticipates that it will generate an estimated $60 million in revenues in 2005 and more than $200 million in 2006. For Q4-05, eBay expects the acquisition to be dilutive to pro forma and GAAP earnings per share by $0.01 and $0.04 respectively. For the full year 2006, eBay expects the transaction to be dilutive to pro forma and GAAP earnings per share by $0.04 and $0.12 respectively, with breakeven on a pro forma basis expected in the fourth quarter of 2006. On a long-term basis, eBay expects Skype operating margins could be in the range of 20% to 25%.

The acquisition is subject to various closing conditions and is expected to close in the fourth quarter of 2005.

Email For A Survey

AlienCamel, the email service that does a pretty good job of keeping out spam and viruses I’ve mentioned in the past, is offering a year’s Clean Email in return for feedback:

We are looking for 50 special users who are willing to give us some feedback about our email service from time to time. In return, we will give you a year’s subscription to AlienCamel’s “Clean Email” service for free.

You must sign up, however, which means having a PayPal account.

Vmyths Up For Sale On eBay

Vmyths, the web site that takes a skeptical look a the anti-virus industry, is for sale on eBay: item 5762562547  at a starting bid of $200,000. (Or you can buy the whole thing for $280,000:

Vmyths.com is the leading independent voice in the computer security and computer virus industry. The site is owned by an investor not directly involved in the industry and is looking to sell the site to either another investor or to a someone directly involved in the industry that could benefit from the editorial exposure from being associated with the site. We have an exclusive contract to Rob Rosenberger, editor-at-large. The site comes with URL, all content, and rights to Rob’s contract.

Rob Rosenberger, the editor, explains in his newsletter (not available on the website at the time of writing) that co-founder Eric Robichaud wants to sell Vmyths, and he’s got experience selling websites on eBay. But our readers will want to know: “why now?” Robichaud called to say he’s riding on the coattails of a bombshell we dropped in our latest “Whisper” Update. He told me to announce the eBay auction in a special newsletter or he’d do it himself in an advertisement.

I’ve not always agreed with Vmyths, believing sometimes that a threat is a threat and not always a hype. But its skeptical approach has been a useful antidote to the often inflated claims made by some security vendors. Indeed, Rob’s fear is that one of the companies he has been most scathing of, Britain-based mi2g, could shut down one of their most vocal critics with a meager $200k bid. Oh, sure, I could still rant — but years of historical insight would disappear overnight.

That would definitely be a shame.