Can eBay tap into social commerce?

Before PayPal became the engine driving eBay, I wondered whether eBay could expand its role as a core technology platform supplier. Arguably, eBay was a social commerce player before anyone called it “social commerce,” and it was the original e-commerce ecosystem. Ebay’s latest experiment in offering limited local daily deals is being painted as its first foray into services (rather than products) and as a shot across Groupon’s bow.

I’m not sure local deals play to eBay’s strengths. Supporting local small businesses is generally a service-intensive business. Groupon’s advantage is the size of its salesforce and its existing relationships with those merchants, rather than its technology. Groupon’s foray into other commerce infrastructure, including point-of-sale systems, can leverage those advantages, but will anyone trust Groupon as a tech supplier? Small businesses buy search from Google, but the search engine giant hasn’t really staffed up to support them with other marketing services.

Ebay is sourcing deals from Signpost – that also provides some Google offers – and acting more as a distributor. Ebay has a big customer base, though they probably don’t associate its brand with local services. This doesn’t seem like a bricks-and-clicks platform play to me, but rather a PayPal extension. Keep an eye on it, though, there’s more life in eBay these days than there has been in a long time.

 

Relevant Analyst
P1040724

David Card

VP Research Gigaom Research

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