eBay’s Challenge in 2009: Googzilla

December 31, 2008

In my September 2007 study Google Version 2.0, published by Infonortics Ltd. in Tetbury, Glou. here, I commented on Google’s eCommerce capabilities. I included a diagram that outlined one of the scenarios that was taking shape as I did the research for that report. The idea was for Google to ignore Amazon and focus on a weakening eBay. Without fanfare, Google would attract sellers. Then Google’s “as is” back office capabilities were known mostly by AdSense participants who received accounting reports and checks from the GOOG without much fuss or hassle. Flash forward to 2009, and we see more of the Google eCommerce strategy becoming visible. First, Google uses the Amazon service to deliver music to its Android based mobile devices. And, Pete Barlas, Investor’s Business Daily, summarized data about Google’s growing influence in eCommerce. You can read “Google’s Product Search Catching Up Fast with Shopping Rivals” here for a short period of time. (Yahoo News stories often go dark quickly, so you may have to hunt around for this December 29, 2008, news story.) For me, the key comment in the article was:

Google Product Search had 11.8 million unique visitors in November. That’s up a whopping 786% from the year-ago period — the biggest one-year increase by far of any online comparison shopping service, says market tracker comScore.

Mr. Barlas includes other useful nuggets in his story; for example, the display of “sample searches” to intrigue shoppers. But I wanted to add two comments about this Google service not discussed in Mr. Barlas’ article:

First, eBay is a wounded duck. The signals of discontent have been flashing for a while. Fees have gone up. The issues about fraud and PayPal’s customer service continue to spark discussions among eBay users. The shift to fixed price items produces a more predictable shopping experience, but Amazon and now Google offer more efficient mechanisms. The eBay model is wearing out. When I look for a computer part, I have to wade through pages of irrelevant listings. Try a search for NC6000 and you will see hundreds of batteries and components. There is no way to limit the scope of the query to a working laptop computer.

Second, Google moves slowly and on numerous fronts at one time. As a result, it is easy to ignore a Google activity. Competitors like eBay have not figured out how to identify key Google moves, track them, and put defensive actions into play. Google seems to be floundering along with lava lamps and Odwalla juice and then the Google’s shadow falls across the eBay business. Surprise. Google has been a player in eCommerce for six or seven years. Now, Googzilla is in the front yard. Eeek.

In Google Version 2.0, the investments Google made in R&D make it clear that there are six business sectors in which Google is making similar strategic moves. Eeek is not a satisfactory response. By the time research data shows the shift is underway, the damage is done. Remediation is difficult, expensive, and likely to be ineffective. In my opinion, 2009 will be a pivotal year for eBay.

Stephen Arnold, December 31, 2008


One Response to “eBay’s Challenge in 2009: Googzilla”

  1. TechWag » Startup Happiness final integration done on January 4th, 2009 6:16 pm

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