Here comes eBay!

Although I did not expect eBay to acquire GSI Commerce, I can't say it was a complete surprise. In 2010 eBay made some interesting acquisitions leading up to this latest one:

ebay.jpg

12/2010 | brand4friends....German flash sales site
12/2010 | Milo..................In-store product inventory
12/2010 | Critical Path......Mobile apps
06/2010 | RedLaser..........Mobile apps
03/2010 | Magento...........e-Commerce software

I previously discussed their acquisition of Critical Path Software and RedLaser as part of their mobile strategy, where they are leading the m-commerce charge. Magento and Milo certainly helped build their ability to host e-commerce sites for brick-and-mortar retailers, although I know of none that have signed on.

GSI Commerce was founded in 1995 with a focus on selling sporting goods. Today they continue to be a leader in that space but also host traditional brick-and-mortar retailer websites like Toys-R-Us, Zales, and Aeropostale.

It seems that eBay wants to not only be the online selling engine for micro-commerce but possibly move upstream and power retailer's e-commerce websites. This reminds me of the failed attempt (my opinion) by Amazon to host other retailers' websites. In fact, Toys-R-Us used to be hosted by Amazon until they had a dispute and Toys moved to GSI. I guess Target is still hosted by Amazon, but since they compete on so many items, this never made sense to me.

So will eBay be able to unfold this strategy successfully like they did with their PayPal acquisition, or will this be another Skype idea? At this point, I'm leaning toward Skype.

Comments:

You knew a lot of things I didn't David. It seems like everyone has a piece of the eBay knowledge pie (which is obviously huge).

I think Ebay's decided it wants to take on Amazon. It has some potential, I think. Amazon might be losing a step. But if I was brand manager I'd still be hesitant to trust my stuff (most especially customer info) with anyone else - Amazon OR Ebay. I never blamed Amazon,,,just always though the retailers' had made a bad decision.

Posted by Paula Rosenblum on March 28, 2011 at 12:42 PM CDT #

The reason why Target, Toys R Us etc went to Amazon was because they probably viewed Amazon as a technology company than as a competitor. And that could also be a reason why they trusted Amazon with their data.

If competing companies could use SalesForce.com and trust SF not to disclose their customer data to their competitors, why not Amazon?

I believe that Amazon's platform is still awesome and hopefully they are able to host more retailers irrespective of competition.

Posted by Shankar V on March 28, 2011 at 10:36 PM CDT #

I'm not suggesting at all that Amazon would steal data. Rather, as an example, when Circuit City sold via Amazon the same item was shown with a Circuit City price and an Amazon price. Which do you think the customer ordered? Granted, that's not the case with Target so I guess there's been better "firewalling" between products. Nevertheless, its tough for a company like Amazon or eBay to be the infrastructure provider and a competitor on products, and let's face it, both companies sell everything and therefore compete with all other retailers.

Totally agree that both Amazon and eBay have awesome platforms.

Posted by David on March 29, 2011 at 01:07 AM CDT #

You are missing the key distinction between Amazon and Ebay. Amazon is a retailer first and foremost and for years has been seeking to get other retailers to help fund its infrastructure investment to run its own business (initiall selling books, now selling anything). And yes, Amazon agreements allow them to keep much data depending on services they are providing. Ebay is NOT a retailer in any way shape or form. eBay's business has always been built on helping others sell on line. Huge difference and one that will win in the long run. It's seems to take some retailers longer than others to realize Amazon is COMPETITION. Ebay is clearly not. Check out the "Ecommerce Encroachment" graphic in today's WSJ. If you were an enterpris retailer, you would chose eBay over Amazon in a heartbeat. http://online.wsj.com/article/SB10001424052748704471904576228532935603752.html?mod=wsj_qt_latest_wsj

Posted by Phred on March 29, 2011 at 03:00 AM CDT #

Phred, that WSJ is excellent. Thanks for pointing it out.

Posted by David on March 29, 2011 at 03:18 AM CDT #

I think Marks & Spencer (in the UK) is still on an Amazon hosted platform, but now that Laura Wade-Gery has moved to M&S from Tesco.com I would imagine that they may come away from Amazon soon.

Posted by MilesT on March 31, 2011 at 12:51 AM CDT #

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David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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