New Update
content="text/html; charset=ISO-8859-1"
http-equiv="content-type">
There is a profound shift happening on
the online market place and eBay is determined to dominate it. But the
last two years the recession globally and eBay's acquisition
of Skype created an impression that the company was fraying out of its
core focus area - online retailing and connecting buyers and sellers.
But with series of strategic decisions like selling 70% of Skype and a
slew of other synergistic acquisitions like GMarket in Korea,
Shopping.com, StubHub and classified sites such as Gumtree and LoQUo
has brought eBay back on the track. Much of the turnaround is credited
to John
Donahoe, who took over as President and CEO of eBay
in 2008 is bullish about eBay's domination in the online
market place. In an exclusive interview to style="font-weight: bold;">DATAQUEST,
Donahoe credits the strategic role its India development center in
Chennai is playing and enabling eBay becoming a more technology driven
company. Excerpts
You
took over from Meg Whitman two years back- since then what has changed
and what's not?
The core strategy of the company has not changed a bit-connecting
buyers and sellers. We have created huge opportunities for people which
did not exist earlier. For instance today by using eBay an artisan in
India can sell his produce globally. What has changed however is the
environment-the internet, ecommerce, and online payments as a result of
the competitive industry environment. So we are morphing ourselves to
better meet these changes. My Job at eBay is to apply the
core values of the company and what I am doing is making eBay
becoming a more technology driven company and I believe that is
essential for eBay to continue provide rich customer experiences around
the world.
In being more technology driven, I have to say here that the Chennai
ODC is playing a critical and strategic role in developing products
that are deployed across eBay globally. One of the significant things
we did was in opening up our platform for developers-the PayPal X which
is the first open global payments platform. This was fully developed
ground up from our Chennai facility and it's the first
payment system in the world that opened up for third party developers.
These are some of the things that have changed and PayPal X is a great
example.
Isnt's
it just offshoring...
style="font-weight: bold;">
Many people ask me whether we came to Chennai for cost economies. May
be it was true five years back. But over the span of five years our
Chennai development center, the largest for us outside eBay San Jose,
is playing a critical enabling role in our technology driven
initiatives. We have 1400 engineers who play technology as well as
leadership roles.
Many
in the industry have criticised on eBay's acquisition of
Skype due to lack of synergies...
We have well laid out acquisition strategies. We do acquisitions that
strengthen our core business and the ones that hasten our skills. But
Skype we found out had some synergistic issues hence we sold 70% of it
and retained 30%. If you look at other acquisitions like GMarket that
we did in Korea and Israel based Fraud Sciences and host of others
— they all have redefined our competencies. We have a very
clear acquisition strategy and we do companies of all sizes like the
one we did recently — a small iPhone apps company Red Laser.
How
do you see the big shift to mobile?
Mobile commerce indeed has very big potential. We are by far the
largest mobile commerce company in the world. For instance eBay
iPhone/iPad apps has seen phenomenal uptake. Take the case of the Bump
App (Money App) - in which one can bump money using the mobile phone.
The lines between online and mobile is blurring it's more of
customer choice and how we are enabling those choices in various form
factors. The iPhones according to me has changed the whole mobile space
and consumers started using mobile in many innovative ways. I believe
by 2013 more than half of the online transactions will be done out from
a mobile phone leading to huge spike in M-Commerce.
How
relevant is PayPal today given other payment options like Credit card
etc.?
style="font-weight: bold;">
Well it rides on top of the global banking system. PayPal is clearly
the safest and the convenient way to pay online. It's safe
because you never share any financial data and its custom made for
eCommerce needs. For instance globally PayPal handles 68% of
eBay's volume. PayPal obviously is bigger than eBay as it
handles non-eBay sites too, and eBay is one of its consumers and that
is beauty, convenience and the pan global footprint PayPalÂ
provides for eCommerce.
You
talked about the competitive environment, so what are the things that
differentiate eBay in the online market place?
style="font-weight: bold;">
eBay is different in many ways. We are not just a retailer of selling
goods online. The secondary market is our sweet spot. Many
retailers use eBay to liquidate excess inventory of products that has
been replaced by newer ones in the market. Say a mobile phone
model launched 18 months back will be found in eBay at a
great deal. It's new but an older model. The other kind of
stuff you find in eBay is almost new products like a mobile phone with
some minor issues like its 'box in open condition'.
Anyways you look at its great value for the consumers- for both the
buyer and the seller. The secondary market is great opportunity for us
as well as to retailer and we are bullish on that segment.
Phishing
is one major problem how are you dealing with that?
I must say the incidence of phishing of PayPal and eBay sites have come
down due to the proactive measures we have taken the last few years.
The Chennai development team has worked on this area aggressively
thereby hastening safety and security. For instance the green tab on
the browser signifies it's a genuine PayPal site. In addition
we have instituted whole lot of anti-phishing mechanisms on our sites
that ensure great level of trust and safety.
What
is your vision for India?
India is one of the most important markets for eBay , the level of
technology leader ship our Chennai development center provides is
critical for eBay globally. It is outstanding product leadership. As a
market, we are a leading eCommerce site in India with over 2.5 million
registered users. All listing in India offer paisa pay secure online
payment. At any given point in India we have over 400,000 live listing
on eBay India. We will deepen both the technology as well a market
commitment here and India development teams will play a significant
role in eBay's technology leadership.
Advertisment