Amazon vs eBay: always and, never or

1. Some time ago, Matt Howard and I had a long discussion about Amazon's versus eBay's approach to ecommerce enablement. Amazon's auto-recommendation technology makes your products more discoverable, but you brand name doesn't get much exposure. eBay gives you the option of building your own store, but is not nearly as good at cross selling your products.

After debating how ecommerce newcomers would view these trade-offs, we concluded there ought to be a best-of-both-worlds solution that offers Amazon-like features while allowing you to assert your identity. Within months, Amazon came through with Webstore.

2. Stephen O'Grady says if he wins the lottery tomorrow, he'd build a service atop Amazon for connecting Linux package management apps with individual application experts. Such a system would need hosting (S3/EC2), obviously, for a jobs marketplace (Mechanical Turk) on the front end, APIs for interfacing with Portage/Synaptic/Yum, as well as payment/identity management infrastructure (FPS) on the back end.

eBay, if you think about it, is theoretically capable of delivering many of the same building blocks: a marketplace, an identity AND reputation management system, PayPal. Eric Billingsley, senior director of eBay Research Labs, even told CNET that his group's eBox initiative *may* allow external developers to build applications within eBay's soon-to-be SOA framework and run them on eBay's platform.

But... unlike Amazon's FPS, PayPal doesn't tie off-eBay transactions (which, according to BusinessWeek, represent 40% of the $11 billion+ it processed in 2006) to buyers' and sellers' eBay identities. Also interestingly, an eBay spokesperson interjected during Billingsley's CNET interview that the company has not committed to opening up eBox ("the decision is too far out to say with any kind of accuracy which way we're leaning"). In other words, eBay draws distinct boundaries between technologies it uses for its own operations and tools it sells.

3. Stephen sees Amazon more as a technology than a retail company; I'm not sure I agree. Instead, I think it's more of an uber-retailer for whom there are no either/ors. Anything that's theirs (from auto-recommendation software to computing resources to warehouse capacity - and even books!) could be yours for a price. Almost everything is a product; very little is pure overhead.

The folks at Trendwatching say that innovation means setting aside "or" and focusing on "and".  Amazon, it seems, would agree.

Comments

[stephen o'grady]

"Stephen sees Amazon more as a technology than a retail company; I'm not sure I agree. Instead, I think it's more of an uber-retailer for whom there are no either/ors."

it's a fine line, i agree, but i looked at it this way. is Amazon a technology enabled bookseller, or a book seller that resells technology? a debatable point, to be sure, but my belief is the former. though i used to believe the latter.

[Isabel Wang]

I'm wondering if it needs to be one or the other? I still think Amazon's core competency is observing customer behavior and using the data to sell anyone whatever.

If you're reading a Ruby book, you'd probably be interested in tinkering with a Ruby virtual appliance. If you've deployed a Ruby appliance, maybe you could use a tips and tricks manual.

It doesn't matter which came first, and you might not see either as more of a core product than the other. Instead, you'd just keep racking up debits in your Amazon Payments account :)

[Jeff Huckaby]

The question I have about these Amazon services is if they are just selling off excess infrastructure or are they committed to delivering technical solutions. Would they be willing to invest $500 million in a new datacenter to handle increased S3/EC2 loads?

Has there been any clear mentions of their roadmap for AWS? Do revenues/losses from AWS make it as line items in their earnings reports?

[Isabel Wang]

I see FPS as a sign of their commitment - a company that isn't serious about delivering technical solutions wouldn't take the time to write 250+ pages of APIs.

But I don't think AWS shows up as a line item in their financial reports. Yet.