|Sun July 1 2012 13:27:19|
CEO Counts on Disruptive Mindset to Reinvent eBay
By: Ina Steiner
eBay's John Donahoe is leaving former CEO Meg Whitman's vision behind as he chases innovation in the ecommerce space, he told Fast Company magazine in an interview titled, "How Jack Abraham Is Reinventing Ebay." However, it's a good bet that most eBay sellers don't know who Jack Abraham is and that his company, Milo, is part of Donahoe's vision for the success of eBay.
What Is Milo?
When the 25-year old Abraham was in college, eBay actually shut down is first venture, which he told EcommerceBytes Contributing Editor Greg Holden in 2010 was an "eBay arbitrage" business. His software would find all the instances of a product, like an Xbox 360, that were up for sale on eBay. "It would buy the product at a cheap price, relist it, and sell it for a higher price," he explained.
He went on to launch Milo while attending business school. Milo shows online and mobile searchers inventory from local retail stores (though for the most part it picks up inventory data from national chains rather than small independent retailers), displaying availability and cost. By the end of 2010, eBay acquired Milo as Google began integrating local inventory data into its shopping engine.
Donahoe told Fast Company that the increased acceptance and use of mobile devices was blurring the lines between online and offline commerce. His goal is simple: He wants to put eBay at the center of this new hybrid online/offline shopping experience.
"So like a rich kid trying to buy his way to cool," Fast Company wrote, "Donahoe ordered his leadership team to snap up the best innovations and talent in the market." Milo was one of those acquisitions.
Monetization - Don't Worry, Be Happy
But how do you monetize a transaction made at a local retailer instead of on eBay? Apparently through PayPal, in part. Fast Company wrote, "Every time anyone would make an online purchase through eBay's presumably seamless cross-channel network, PayPal would grab a cut of the transaction. When eBay drives traffic to a store, it would earn a referral fee."
But how specifically will eBay profit from cross-channel shopping? Donahoe: "We're not worried about profits, in my mind."
Milo has a challenge in adding small local retailers, and in providing good search results. eBay's image is another challenge, according to Forrester analyst Brian Walker, who told Fast Company, "even if all of eBay's acquisitions sync up flawlessly, consumer perception will still be difficult to shake."
And can eBay's corporate culture succeed at taking its small innovate acquisitions and leveraging them in its business? Square COO Keith Rabois told Fast Company that eBay "has been awful at inculcating entrepreneurial talent."
Traditional Small Sellers Not Part of eBay's Vision
Many longtime eBay sellers are convinced eBay is turning its back on them. A seller who read the Fast Company article wrote to EcommerceBytes, "It has some VERY interesting comments from John Donahoe and the rest of his team on what they want eBay to be, and small, auction using sellers aren't part of it."
A Fast Company reader commented, "Amazon are killing eBay, they've attracted mid-range vendors and are far better positioned to exploit "cross-channel-shopping" than eBay ever will be. eBay should be focusing on what provided its rise to prominence, as they've seemingly forgot. Providing a platform to allow consumers to sell to consumers, duh."
Fast Company said Donahoe is relying on the twenty something-year-old Abraham to help steer eBay to the future of retail. ""I don't pretend to be a visionary," the CEO admits. "Jack sees a future that others don't. He just has a disruptive mind-set of what he wants to do and absolute clarity on it." As he speaks, Donahoe affectionately slaps Abraham's thigh and shoulder at least a dozen times, showing off his MVP."
Will innovation and a disruptive mind-set help rejuvenate eBay and compete with Amazon? If you were the CEO of eBay, what would your vision be for the future of the company?