Into this combination, author of a book about amazon, and carl icon talked about how amazon is basically trumping ebay in every way -- carl icahn talked about how amazon is basically trumping ebay in every way.
Not in payments, though.
They have tried to replicate the acquisition, trying to build amazon payments, trying to syndicate those accounts across other websites, and it is a space that paypal really owns.
In the sense that there's opportunity for ebay going forward and competing with amazon, it is approaching off- line retailers and offering them a range of services, helping them with technology, infrastructure, and payments.
To that extent, paypal and ebay really do need to be married.
You wonder if amazon in particular might use ebay more and more generously because it would not be perceived as a competitor.
I wonder if that is one of the thoughts that icahn has, that is the market for paypal gets bigger when it is not part of ebay.
What about the future and commerce in general?
They want to be known as the place where you can go to buy just about everything, but people do not think of ebay in that way.
They continue to think of it as an auction house.
The one thing to me that i thought had potential was the same day delivery where i have been able to get things within an hour from them.
The process was pretty seamless.
The goods and inventory is pretty limited, but it is something that amazon right now cannot do.
Right, but i think there is opportunity in being that dealer to all of those retailers that find themselves caught up in amazon's vortex and need a friend and ally.
That is why ebay bought gsi commerce.
It is having some success.
I think splitting off paypal, divorcing the assets but sit at a disadvantageous position in terms of approaching the macy's of the world -- put it at a disadvantageous position.
The capacity to warehouse lots and lots of products -- i think of the quarter they announced today.
71% of the products sold on ebay were "buy it now" at one price.
The perception of ebay from back in the dot-calom bubble is not what it is today.
Drones got a lot of attention.
I asked john donahoe in particular about them when we sat down over the holidays.
Listen to what he had to say.
We are focusing on things that will change consumer experience today.
You think it is a long-term fantasy?
He came right out and said, "look, that's not happening.
A he may have a point.
That may have been more of a public relations lori -- ploy, but the larger point is that amazon controls and owns distribution to people's homes.
Ebay has always farmed that out.
It turns out to be really central to how customers think when they are making a purchase.
They want reliability.
They want to know when an item is going to be delivered and if it will be delayed.
Ebay has never been able to make those promises in the same way that amazon has, and drones are not -- i think that's why that is a key reason we have seen amazon have so much success and ebay really struggle.
Is ebay at a disadvantage without paypal?
Ebay without paypal is one of the second-biggest marketplaces on the internet -- is the second-biggest marketplace on the internet.
Particularly when i read your book, the thought i had was that amazon is really going after being walmart and having all the disruptive effects, and that's a nice word for it, but think of the way walmart was received in mainstream america, how it destroyed households across america.
Think of a society where you have walmart workers trying to get food stamps because they are not gay in -- not getting paid enough in their community.
It has all happened.
Amazon look at that as a model.
Not that they want to hurt workers or an economy, but ebay looks at itself is a very different model -- as an enabler of small business.
The classic example of selling beanie babies out of a living room but for a fixed rise and selling bigger items as well -- for a fixed price and selling bigger items as well.
They really have emerged as a model of how commerce can happen in the future online.
I think that competition is not going to change, regardless of how it is being paid for.
When you look at activist investors, carl icahn is focusing not just on ebay but apple.
How do you see this playing out?
Right now, he has 0.8% of ebay.
He is in no position to get them to do anything except for having a loud voice.
Name of apple.
He will never own an up of apple to force a change -- same with apple.
He will never own enough of apple to force a change.
What is interesting is i do not think the patient shareholder base that exists with apple exists with ebay.
Ebay shareholders have been through enough where they are going to want change.
Also, the board has a lot of pretty powerful people.
Not that apple does not, but mark andreessen is on the board.
The founder of ebay.
How much does that matter when it comes to a situation like this?
I think that it matters to a certain extent, but the stock rise today -- even despite cory's point that carl icahn has a small stake tom of these are impatient shareholders.
They want to see short-term value.
That is why they have been buying the stock back.
A lot of people are looking for today's news to be bad.
Carl icahn made today's news good.
I think it is also worth going back and thinking about what happened way back in the day.
Brad and i remember -- collect that's why i asked you guys -- that's why i asked you guys.
Meg whitman decided to buy ebay and ebay decided to buy paypal, not because paypal was profitable.
Not because paypal was successful, but because paypal has so much control over the ebay platform.
So many ebayers were using paypal as a payment method, even though paypal was losing a ton of money, that ebay recognizes someone else got their hands on paypal, it would be a threat to ebay.
That is why they bought it.
They had their own payment platform, and it was not taking off quite as well.
You may remember covering this back in the day.
You are bringing it all back.
The big risk for ebay right now is the distraction that is created at a key strategic moment.
You can tell the inflection in his voice changed.
He is worried about this.
The fact that shareholders are swarming around the idea creates a little bit of a self- fulfilling prophecy.
Shouldn't he be able to keep it together?
Ceo's are distracted by everything.
They need to keep their eye on the ball, on the drones every day.
These questions are not going away.
If you're shareholders are short term-minded, they do not believe in the long term vision, we see them wobble a little bit, he will have to keep answering these questions -- if yorur
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