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6/29/2006
  GCheckout is BAD for eBay

Google is going to really hurt eBay, just when they need it the least.

eBay is stuck with a massive Web 1.0 legacy, a walled garden that is struggling to keep sellers. eBay, not being technology-oriented (it's all about community over there) is not going to innovate their way outta this situation.

Let's see, GCheckout offers:

That's all great for rapid uptake. By discounting to AdWords users, Google is buying their way in to payment in a HUGE way.

More than that, they are ready to hook up anyone and everyone to immediate internet commerce. What's the one thing eBay had that facilitated that? Reputation management.

Google will build a portable modern reputation system - i.e. "can I trust this vendor, let me see what everyone who buys with GCheckout says". Google should have the best trust/reputation system for shopping, and it's gonna be global across the internet.

That goes to the heart of eBay's value. Google is already cutting a ton of margin out of eBay's heart, and with a reputation system they'll take away a major thing eBay had done well in its walled garden and Google will democratize it.

Google Base, Froogle, AdWords and AdWords CPA are more of the chess pieces that Google has on the board in this game. GCheckout is the wheel they revolve around. They may be immature, but Google's opening moves are starting to come together.

All of that plus free spells hard times for eBay ahead.

Terry, this is Meg again - are we still OK for $23/sh?
 


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