eBay has recently seen a sharp drop in traffic as they cut their affiliate stream and Google ad spend.
When you are a default category leader you no longer compete against others in your category. You compete against other categories. Google and Amazon.com understand that. Microsoft maybe. eBay no.
eBay could have used the last decade to create communities around buying, selling, and collecting...taking a slice of any transaction as they turn buyers to sellers or sellers to buyers.
* They could have offered awards for collector of the month, seller of the month, buyer of the month, and done interviews with the winners.
* They could have a section called deal hunting where they offer tips on how to find the best deals.
* They could have a section called "good as new" where people talk where people talk about old items that are a bargain, and in some cases even better than new.
* They could have allowed sellers and buyers to build editorial communities and collections on the eBay site. Control the conversation and control commerce.
* What if eBay could have got you to tag just about everything you owned, and then told you roughly what it was worth (based on recent transaction data) and had you put a buy it now price on it? CueCat was a failure, but eBay has a much better platform to market such a device on.
Instead they did nothing. They lost a decade to improvements in search, Amazon.com, open source software, blogs, and the rest of the web.
Rather than improving their network feedback mechanism and making a deeper network, the new eBay strategy is to try to be more like Amazon, but that won't work. While eBay spent a decade alienating buyers and sellers (with no innovation, shifting fees, encouraging a market lemons, etc.), Amazon was off building user loyalty. And now Amazon is out working public relations with a holiday customer review team and extending their platform in new dimensions - offering digital downloads, the Kindle, selling utility computing, and selling their shopping platform.
Staying competitive is more of a mindset than an event. The decay happens long before it impacts revenue. And by the time it impacts revenue there isn't a lot of time to fix things.
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