Should eBay Merge With Amazon?

from the growth-strategy-or-trouble-ahead? dept

Mon, Dec 17th 2007 4:53pm — Mike Masnick

Saul Hansell over at the NY Times has a thought-provoking piece asking if Amazon should buy eBay. While the two have been competitors for some time, Hansell is exactly right in pointing out that Amazon has continued to innovate and adapt, while eBay has basically held steady. eBay built up a tremendous business and has basically managed to keep that going without killing it -- but has done little of note that's new or interesting in a long time. It's recent purchases have been rather hard to understand, from Skype to Stumbleupon, and so far, haven't helped eBay very much at all. Meanwhile, Amazon keeps on innovating, improving its overall shopping experience while successfully moving into offering a variety of compelling web services (made even more compelling with the recent addition of its new database offering).

The real question might be what would Amazon do with eBay if it controlled it. There's something to be said for just having access to all those eBay users -- but could Amazon then turn them (and eBay itself) into something even more compelling? Or would tinkering with eBay be more trouble than it's worth? It might also raise questions about what Amazon would do with Skype. If anything, it seems like any such move would be quite risky. Merging two large companies with unique cultures is astoundingly difficult and often causes a lot more problems than bargained for. Amazon has been trying out a lot of innovative things lately, and trying to digest a company like eBay would risk a tremendous distraction that could hurt those projects.

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Filed Under: e-commerce, mergers
Companies: amazon, ebay

11 Comments

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freakengine, 17 Dec 2007 @ 5:38pm

I don't think Amazon has been innovative
If adding a slew of e-tailers to their marketplace so as to cloud their brand is innovation then perhaps Amazon qualifies, but in my view all they've done is dilute their image and confuse customers with these actions. They also refuse to back purchases made with outside vendors that they rep which makes me wonder why I should ever buy from them that way. Why wouldn't I just go to those vendors directly?

Oh, and don't get me started on the Kindle. A $400 e-book reader? Is that some sort of joke?
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Nick (profile), 17 Dec 2007 @ 5:43pm

Here is an idea: eBay should hire Amazon to re-make their entire service from the ground up and include new Amazon-like features and an easier to use API, and then Amazon should buy eBay if/when the upgrade makes a difference. Win/win for both companies and customers. Then Amazon will integrate Skype into their web services somehow. As for Stumbleupon, I', not sure how it can be added to the strategy of either company.
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Anonymous Coward, 17 Dec 2007 @ 5:58pm

Ebay is dead in the water. I think Amazon has enough brains to stay away from it.
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Anonymous Coward, 17 Dec 2007 @ 6:19pm

I say they should go for it. If it ends up a huge success, then we have a great thing. If the they crash and burn, someone else will step to the plate.
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Anonymous Coward, 17 Dec 2007 @ 6:20pm

Re:
Sorry. If they crash and burn.
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Thom, 17 Dec 2007 @ 8:13pm

Red
Ebay is like the redneck hillbilly shooting arrows into a flock of birds directly over his head in hopes of scoring a meal. On a rare occassion he gets fed, but most of the times he misses, and eventually one of his arrows comes down and kills him.

Ebay's throwing money at stupid ideas that can't work. It's ignoring and driving away both the buyers and sellers that make it money in failed attempts to attract others. It's going to die soon anyway or at least mortally wound itself. Amazon doesn't need to buy Ebay, it just needs to sit back until Ebay's exhausted all the stupid ideas and is on it's death bed. Then Amazon can pick Ebay up for a song or implement a competitor, that doesn't face what marginal competition Ebay is now, and put Ebay to sleep.
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brandon, 17 Dec 2007 @ 9:11pm

ummm..
i'll admit, I didn't read the article above, just the headline.

bad service + bad service = dumb idea
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moe, 18 Dec 2007 @ 12:40am

Re: I don't think Amazon has been innovative
In general, I don't agree with most of what you said but I just had to comment about the Kindle. Sure, if you look at it as just and e-book reader then it is overpriced (maybe). But let's look at the whole picture, here. The amount of content available is very impressive, including numerous major news outlets. The ease of use for purchasing and receiving the content makes it unique among all other e-readers. And the fact that Amazon picks up your connectivity charges means no additional data plans and associated costs for you.

If you don't see that as innovation, then I'm curious as to what would satisfy your narrow definition of the word.
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mkam, 18 Dec 2007 @ 5:49am

half.com vs amazon
The other question I would ask is what would happen between half.com and amazon. I don't ebay much but use half.com all the time for naming my price and selling, and buying stuff at a fixed price. It is consistently lower than amazon on most duplicate items. Ebay, in my mind, doesn't really complete with amazon (at least they have vastly different approaches to selling). I could see ebay staying the same and amazon merging towards a more open format like half.com which would potentially drive more sellers and buyers to amazon.

mkam
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Tarditi, 18 Dec 2007 @ 6:16am

It's worth it for Half.com and PayPal alone...
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moe, 18 Dec 2007 @ 7:43am

Re:
There's something I hadn't considered. Amazon could eliminate it's service charges for PayPal purchases and add the revenue stream from other services processing PayPal payments. I'd love to look at the cost/benefit analysis on that aspect.
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