Got Ads?
8/03/2006
  AOL is eBay's Ghost of X-mas Future
AOL was the original Web 0.0 company. It's now struggling and belatedly changing to a free model:
AOL will offer its distinctive services such as email and web security free to anyone with broadband, relying on the revenues generated by online advertising. ...

It's probably too late for AOL. They've lost 9 million customers in four years, as people:

Ed Morrissey sums up:

At one time, Internet users without AOL had little choice in general-interest content, or at least a limited way to access it. With AOL, one could find reference materials, news services, magazines, chat rooms, e-mail, gaming, and a wide variety of other content in one spot. The Internet, without that powerful interface, was uncharted territory for most casual users. That changed with the advent of Yahoo!, Google, and other navigational sites. Instead of relying on AOL's slow-loading interface, netsurfers could find their content quickly and reliably, using just a web browser.

Substitute eBay for AOL, and change the services from general web stuff to shopping search, and you can see the Ghost of Christmas future for eBay.

What's happened to AOL doesn't bode well for eBay. eBay is a true Web 1.0 company, with a walled garden around its key services:

Now that at least two of those key eBay features are available in a free distributed fashion - one via shopping comparison and independent seller sites, the other via Google Checkout and other payment systems, eBay has only its reputation management as a key differentiating feature.

Just as AOL is losing users to free alternatives, eBay will lose sellers.

In other words, Search has hollowed out eBay's market-making power, and Google Checkout is eliminating it's payment advantage. And it's only a matter of time before a distributed trust system (i.e. "Can I trust this seller? What happens if I want to return the product") eliminates eBay's remaining advantage.

The web 2.0 model is that any site can sell anything and the buyer can find it more easily than they can on eBay. Sellers have more control and flexibility and costs will be lower. Since eBay isn't really an innovation oriented company, I don't know how they can escape the fate of AOL.

 


Links to this post:

Create a Link



<< Home

Subscribe to GotAds?



Links



Recent Posts

AOL is eBay's Ghost of X-mas Future


Archives

February 2005 /  March 2005 /  April 2005 /  May 2005 /  June 2005 /  July 2005 /  August 2005 /  September 2005 /  October 2005 /  November 2005 /  December 2005 /  January 2006 /  February 2006 /  March 2006 /  April 2006 /  May 2006 /  June 2006 /  July 2006 /  August 2006 /  September 2006 /  October 2006 /  November 2006 /  December 2006 /  January 2007 /  February 2007 /  March 2007 /  April 2007 /  May 2007 /  June 2007 /  July 2007 /  August 2007 /  September 2007 /  October 2007 /  November 2007 /  December 2007 /  January 2008 /  February 2008 /  March 2008 /  April 2008 /  May 2008 /  June 2008 /  July 2008 /  August 2008 /  September 2008 /  November 2008 /  December 2008 /  January 2009 /  March 2009 /