Major management shake-up at eBay/PayPal/Skype
Posted on July 6, 2006
Filed Under Companies |
A couple of weeks ago there was a rather lengthy interview in the FT with Meg Whitman. Among the interesting portions were some comments about monetizing Skype:
“If you have the largest ecosystem, then you will be the one who will actually figure out the long-term monetization model. “
I don’t necessarily agree with this statement given that Paypal is an abject lesson in how a disruptor can derail your best laid plans. You will recall that Ebay attempted to compete with Paypal before finally giving up and acquiring them. Ebay may indeed have grand ambitions for communications within their ecosystem, but if they do they have been pretty tight lipped about providing insight on them, or better yet, coming out with products/services that demonstrate it.
Lastly, Whitman made this comment:
“I think at the moment I am a big believer in focus. I think companies can only do a small number of things well. Over the past 50 years in the popular business press it’s been, you know, double down on the things you do well, find your core strengths, build on your core strengths. Anything that’s not core, it’s context and get rid of it or outsource it.”
Obviously, Meg Whitman is a remarkable and steady leader, and the above is very sound advice but I have to wonder though if the “core” that she refers to above isn’t in fact a lot broader than she is willing to acknowledge. It could be really simple as in Ebay brings together buyers and sellers and controls the transaction between the two of them, or it could be more complex in that they also own the protocols between buyers and sellers, reputation systems, financial mechanics, marketing automation, customer relationship management for sellers, logistics support, and lastly, product information systems. If this is the core then the context is about increasing the utility of buy-to-seller relationships in order to derive greater financial benefit from it, and more abstractly, provide an open marketplace where the aforementioned utility results in some positive lifestyle benefit for members.
If Whitman believes that walling off the network is the means to enhancing core, then she is in fact sacrificing context in the process and doing long term harm to the company by enabling conditions to develop whereby a “death from below” competitor will emerge and grow.
TechCrunch » Blog Archive » Major management shake-up at eBay/PayPal/Skype: The much anticipated Skype integration into eBay just a few weeks ago turned out to be very unexciting. Is an an increasinlgy walled garden the future of eBay/PayPal and Skype? eBay stocks took a dive today on the announcement; such a strategy could really backfire.
Technorati Tags: Ebay, Meg Whitman
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My name is Jeff Nolan and I write Venture Chronicles. These are my thoughts on technology, innovation, management, public policy and pretty much anything else that I find interesting.
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