The Future of eBay

Rob Hof

Most of the stories on eBay's analyst day today focused on the the company's vow to grow faster than e-commerce at large--and how that's a big challenge given its size and recent slowdown internationally, once its growth engine. But I found a number of other points eBay made more interesting:

* eBay is now acknowledging that it can no longer focus mainly on the "tails" of the demand curve--that is, used products, those past their prime, and those brand-new but in short supply. For the first time I can remember, executives said the middle of the demand curve, meaning mainstream new, in-season retail goods, are the fastest-growing segment of e-commerce. The challenge there, of course, is that it has never been eBay's specialty or, even more important, its brand focus. So it's now scrambling with its acquisition last year and, most recently, its eBay Express site, to join that party.

* eBay's "IT" ad campaign, which I wasn't impressed with, apparently is proving me wrong. eBay's stats indicate that some 22% of buyers, for instance, are likely to consider buying a new kind of item on eBay as a result of the ads, which show the wide variety of merchandise available on eBay. "It's a winner and we'll be sticking with it for a long time," says Bill Cobb, president of eBay North America.

* eBay Motors is going local, starting in four test markets soon. It's already a $14 billion business, or about a third of eBay's gross merchandise volume, so that could be big.

* eBay visitors make some 345 million searches a day on the site--rivaling Google, I believe. All for products, execs noted in a clear jab at Google Base, the search giant's content and product listing service.

* PayPal sees a big business beyond Internet payments. We wrote about last year, but with the recent PayPal Mobile announcement and its debit and credit cards for merchants, there's little doubt it aims to bust out of the Internet.

* Skype is aiming way beyond Internet voice, or even pay-per-call, the markets eBay initially focused on as the reasons for spending $2.6 billion-plus on the little European startup. Skype envisions selling content, such as ringtones and avatars, and creating a PayPal-powered Skype Wallet that would let you, say, order a pizza via Skype from a local joint and then pay for it, all within Skype. Beyond even e-commerce and telephony, execs suggested there are limitless opportunities for what's essentially the largest person-to-person network on the Net--which could mean the largest network for sharing any kind of information, or the world's largest supercomputer for that matter.

* Most interesting of all, eBay CEO Meg Whitman suggested that eBay's reputation system, PayPal's wallet, and Skype's ability to let people have a constant online presence each could be decoupled from their respective services and offered as components of entirely new kinds of services. Meg didn't specifically mentions offering them up to software developers, but said they could become the building blocks for a more customized Web.

eBay's not a company that customarily conjurs up such grand visions just for the heck of it. No guarantee that eBay can do them all, of course. But it's pretty clear that Meg & Co. have a lot more in mind than most people realize.

Before it's here, it's on the Bloomberg Terminal.