How Three Silicon Valley CEOs show eBay’s potential future
eBay has a few paths forward and a vanishingly short time to do it: Which will it be? Michael Dell, Marissa Mayer, or Satya Nadella, or continued slow decline?
In the Michael Dell scenario, eBay is preparing itself to be taken private or acquired by a larger buyer. The first insight behind this move would be that eBay requires a tremendous amount of refocusing and reorganization that would be exceedingly difficult in the public markets.
In the Marissa Mayer scenario, we are somewhat in pump and dump mode. High expectations. High risk. Grab talent and supply quickly through acquisitions to revitalize selection and make up for the fact that so many talented people have left eBay over the years. It's a risky approach. Yahoo grabbed Tumblr for over $1B and missed. Think through what Facebook would be if it had missed on Instagram, and you get some idea of the risks involved here.
Another approach is to be like Satya. Mr. Nadella continues to push Microsoft in a great direction. Common-sense improvements, a clear focus, double-down on what's working, a willingness to part with old orthodoxy, and promoting the right people lead the way here. Oh yeah, and patience.
What will Jamie's eBay legacy be in ecommerce?
It seems clear that eBay will steer away from (yet again) trying to attract big businesses to eBay, at least to sell current season merchandise. The big question is for hard-to-find, consumer-first, second-hand, off-price, hard-to-price items, what are the innovations and gaps they see in the market? COVID has created a significant challenge opportunity. Meanwhile, the company is still fiddling around the edges. What's the new mission? Seriously their new announcement is dark mode?
Chuck Gorman posed a question, saying he was “curious as to why the won’t pursue “big business” right now - there is a wide open path in terms of effective presentation of close out / discontinued merchandise not just now, but in the future as well. This is one of the hardest things to do online IMO, and eBay is literally built for it.”
I think they can for the type of merchandise you mentioned. The chief problem they have is no one wants to go through the hassle to sell it. So they need to setup great resellers to purchase the inventory, or they need to sign major strategic partnerships that are difficult to sign. As I mentioned, the big problem is not that eBay couldn't do it. It's that brands just want someone to buy the distressed stuff in bulk. Which sets up the need for some kind of structured intermediary network.
Miles Thomas asked “Why not takeover bid from Alibaba, Rakuten, or similar, to build market share outside their own countries?”
One is, particularly for Alibaba, their tech is so much better than eBay. So what's to buy? The seller relationships are the thing. Board would not accept this unless they are just giving up / last resort. I don't think this would support Silicon Valley tech margins. Second, the political climate in the US would not allow even a somewhat fading iconic brand like eBay to be acquired by a major Chinese corporation.
