June 22nd, 2006
The eBay Chronicles: Dreams of an eBay Mashup
I’ve been pondering the state of Internet commerce recently, and wondering why eBay has missed the chance to be the center of all commerce while Google has become our main shopping resource by default…without doing anything to deserve it. I’ve even come up with a solution: An eBay mashup that could be the mother of all shopping sites on Web 3.0. Tell me why I’m wrong, but give me a chance to spin my tale first.
It all began when I bought a computer for my father on eBay last week.
I know, I know. I said I would never use eBay again a few months ago, but I couldn’t help myself. I heard about the new eBay Wiki, and the new Skype calling features and just had to go look. Once there I bought my Dad a Father’s Day gift: a computer. Not your regular computer…an actual navigator’s computer in its original box and packaging—really, a circular slide rule—that he had used on B-17s flying out of Norwich in England during the last years of WWII.
As my parents get older, and jettison more and more things, it has become harder to buy anything for them. I won points this year. My dad was thrilled when it arrived, exactly as advertised, and even more rapidly than I had expected. This time I had a great eBay experience, and started to think maybe I was going to be an eBayer after all.
The whole Father’s Day gift idea started the way it does for most of us who spend a lot of time online these days: by doing a search on Google. I threw in a couple of key words: B-17 and Navigator. The results were just what you would expect: overwhelming, and generally useless. One of the unspoken realities about life in the days of Google is that while the search engine might deliver millions of search results, finding the ones you want is still like pawing through the haystack to find that proverbial needle. Unless you’ve mastered the art of query language terms, or are looking for something with a highly unique descriptive tag, Google’s mysterious algorithms sort results in weird, wonderful, and wacky ways. This is fine if you have time to wander aimlessly through the web, but a problem if you have other things to do. And worse for the Internet shopper, Google provides no features to make shopping easier or better.
May 17th, 2006
America’s Future…isn’t in America
It’s funny what you can learn from your kids. My latest lessons have to do with the gnashing of teeth over America ’s threatened future and the flattening of the world that is destroying our competitive advantage. In a funny way, recent events involving our youngest and oldest child might point to a way out of the crisis.
With America’s trade deficit ballooning, immigration and border controls a hot topic, and explosive economies in both India and China making it patently clear that the nexus of worldwide commercial activity has moved to Asia, We have a myopia regarding other countries and cultures around the world that is rooted in arrogance, and power, and isolation. the Grumpy Gus’s of the status quo are feeling particularly curmudgeonly these days. Not only are these upstart nations sending us cheap goods and manning thousands of call centers the doomsayers wail, but they are minting five times as many engineers each year. This is the end of civilization as we know it.
The problem so far is that while lots of smart folks can see the looming storm, precious few have any prescriptions for dealing with it. The latest example was a recent op-ed by Michael Schrage in the Financial Times . The author does us all a service by pointing out the obvious: Trying to somehow shore up America science education is like having the Little Dutch Boy stick his finger in the dyke. In the face of a giant wage differential (we live in splendor, the rest of the world somewhat less comfortably), and a tiny educational differential (trained engineers are good at math no matter where they live), this trend isn’t going to stop anytime soon. Bemoaning it does no good whatsoever. Schrage has some fuzzy ideas about how to use the talent in elite western universities to equip grads with some kind of weapons to succeed, but it makes little sense to me, or the incisive Nicholas Carr on his blog where he decries the lack of proffered solutions.
Luckily there is an answer. There is something that we can export to the rest of the world in vast quantities to redress the balance of trade.
April 27th, 2006
Tyranny of the New
In the past few days a couple of writers—Gary Hamel on Google in the Wall Street Journal and Om Malik regarding EBay—have made clear just how corrosive the Web 2.0 bubble mentality and the Wall Street mantra of “Growth at all Costs” has become. I feel compelled to make the point that I’ve made several times before about both companies here, here, and here: First, you have to take care of your existing business, and keep your customers happy, before heading off for parts unknown.
This simple truism seems to have escaped some of the most respected commentators in the digital world, maybe because it is so old fashioned. New isn’t better unless it improves the old. Shoring up the base product, then selling more services to happy existing customers, is by far the easiest way to grow any business. Setting out across the landscape for new territories to conquer is much more expensive, much more resource-intensive, and much less likely to succeed. So why is most of the digerati so completely enamored of it? Because it is much sexier and seductive for big thinkers to come up with new ideas, rather than incrementally improve the old ones.
First Gary Hamel, the silk stocking “management guru” who was one of Enron’s big supporters, wrote an hallucinatory piece of fluff for the Wall Street Journal congratulating Google on reinventing itself at least six times in the past six years. Paul Kedrosky has already done a great job of skewering this effort. The incredible thing about the editorial (hmmm…puff piece) was that no where in the copy does the guy even mention “search” technology. As I’ve said before, and I’ll say again: If Google doesn’t improve the results it is delivering in simple search to its existing customers, and innovate in the very essence of search, it is going to lose its way chasing after all these new ideas.
Secondly, Om Malik, a former colleague and a very smart guy presents his prescriptions for EBay. (He also comments on Hamel’s story here BTW.) And while I’m glad to see that he is trying to think outside the box for the online flea marketer, he also misses the point: EBay is in trouble because it is searching for new things to do instead of taking care of its customers. The problems at EBay are internal. Until the company builds better oversight, enhances fraud control, offers an honest feedback method, and elevates the buyers to a position at least equal to the “power” sellers, it is going to continue to struggle. While it may be fun to brainstorm on podcast about where the company could go—and as an aside, PayPal is already acting like a bank if my experience of how long they used my money in the float is any indication—what EBay really needs to do is to get its existing house in order.
This kind of growth at all costs thinking was what punctured the first Internet bubble. Unless we start demanding that this version’s businesses create and maintain sustainable core operations, the whole thing is going to burst again. Add soaring oil prices, a weakening real estate market, a dependence on cheap overseas labor for all of our manufacturing, and rising interest rates, and the American economy could easily hiccough. This second time around, those of us who lead investors down the garden path into the fantasy Tech Economy aren’t going to be forgiven so easily.
April 26th, 2006
More Microsoft Chinese Backscratching
A few hours after my last post on Bill Gates’ unconscionable silence over China’s sorry political and personal freedoms, ZDNet has reported on a whole new series of agreements between Microsoft and China. This is more evidence of the lack of moral fiber, and the dominance of money and megalomania at the expense of courage in the global economy.
I’m not advocating a Fortress America attitude, just wondering why we can’t have leaders who’ll combine a desire to make money with a willingness to speak out enough to nudge repressive regimes towards more humane policies. If we believe—and I do—that business and commerce can change the world for good, doesn’t it behoove those who are profiting from this to use their success to try and make the world a better place?
So I’m bemoaning our country’s business leaders’ seeming inability to look at the big picture, pointing out how pouring billions into China may reap short term benefits but also props up a corrupt regime. At the same time a good friend, Dave Churbuck, is in China right now and is filing a series of fascinating blog reports about what he is discovering here, and here and here. They are all worth reading, and while I might argue with him that he’s being a bit naïve in his view of the cultural landscape, there is no mistaking the passion, and intelligence, and exuberance that he is encountering. Not to mention his.
So, what is the right way to engage with a reactionary country that has unleashed the floodgates of commerce? Will the rise of the middle class inevitably lead to a relaxation of political and personal freedom in China that will create a society as open and extraordinary as our own? Or is the great sucking sound of our money, know-how, ideas, and innovations heading across the Pacific going to end up with us as an emaciated hull, in thrall to a resurgent China?
Right now it looks like the Global Economy is a one-way superhighway when it comes to China. My argument is that the greatest export America can make is simple, eternal, and awe-inspiring: “We hold these truths to be self-evident: that all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty and the pursuit of happiness.”
If all we can export is Microsoft Windows, McDonalds, KFC, and Starbucks, we’re not only shortchanging the Chinese, we’re shortchanging ourselves.
April 25th, 2006
Capitalism Gone Amok
I never would have believed that the day would come when I thought that Angelina Jolie, Tom Cruise, Sean Penn, even George Bush all showed more moral fiber than the leaders of the finest companies in the world’s greatest country.
However, judging by last week’s visit of China’s premier Hu Jintao to the United States, that day has come. The fawning and obsequious behavior of the world’s most powerful businessman, Bill Gates, and his deafening silence was one of the most depressing displays of capitalist behavior I’ve seen in recent years. Say what you will about Microsoft’s monopoly, but the reality is that if China wants to keep playing on the world stage it must have access to the Windows operating system. China needs Microsoft more than Microsoft needs China. This is an extraordinary position for a capitalist and a self-defined global health care crusader to find himself in. Gates has a bully pulpit that he could use to make even mild comments about repressive countries, and intransigent leadership, and morally repulsive behaviors.
Instead we are treated to goofy pictures of a silly looking Gates, and his bald-headed hulking sidekick Steve Ballmer, toasting the premier with Dom Perignon and making meaningless comments. It’s not hard to imagine them sitting back in that $60 million mansion afterwards, like Mr Burns and Waylon Smithers of The Simpsons who glory in selling nuclear power to the world for profits, rubbing their hands together in glee at the prospect of more millions pouring into their coffers as every PC sold in China now has to have a legal copy of Windows installed on it. Think of it! A legal version. This is so important a step forward that the premier has to fly over and announce it, and as a result Gates folds his tent, serves a fancy dinner, and conveniently forgets his moral courage.
Isn’t there something very wrong with this tunnel-vision that lets great American companies focus on their self interest while ignoring the social realities that make their success possible? Is making money the only answer, a la Ayn Rand? Or is there a higher order, a moral commandment for those of us in the wealthy world to speak out about wrong wherever we see it? And for those whose privilege and position gives them the power to do this without serious consequence, isn’t it an imperative? And if it isn’t, shouldn’t we demand it of those we elevate to the pantheon?
The American love for the almighty dollar has blinded us to the realities of what is actually going on at the ground level in China. China may be a booming economy, and it may have more consumers than any place on earth, but it is still a repressive, totalitarian place where the government squelches dissent, where speeches by American notables are routinely sanitized of critical comments before being broadcast or reported locally, where the average citizen has his Internet access edited and limited as a matter of course, where Tibet is under thumb, where the army is vast and on high alert, where secrecy and a lack of transparency are endemic, where American ideas and intellectual property are routinely stolen, where a handful of well-connected and corrupt people control much of the wealth, where bribery is commonplace for even the smallest mercantile exchange, where Iran and North Korea can find support for their nuclear ambitions, where female children are routinely aborted, where pollution that is truly toxic is countenanced, where religious freedom is non-existent if you’re part of the Falun Gong, and where dissidents are jailed under phony pretexts and then tried in kangaroo courts that are a throwback to the Manchurian Candidate.
At least our government was cool in its embrace of the Chinese premier, and Hollywood’s celebrities routinely point up issues they care about because they really have no risk once they’ve made it onto the cover of People magazine a few times—after all, Tom Cruise is still a movie star with big box office potential no matter what you think about his beliefs on motherhood and anti-depressant medication.
But don’t look for moral courage from Bill Gates. Nor, for that matter, the leaders of Yahoo, which was implicated in fingering a Chinese dissident recently or Google, which jumps through whatever hoops the Chinese government demands, either. Sure, you can tell me that laissez faire capitalism doesn’t make moral judgments about where it does business. That same argument was prevalent among those doing business with Germany in the 1930s too, as American companies kept fueling the Nazi economy. That abyss of business amorality, and the weakness of our business leaders in speaking out about what they see, is exactly what the Chinese government is counting on to weaken our resolve, hobble our response, and enthrall us to cheap labor and products.
Business can change the world, but it only works when it is paired with a backbone of freedom that gives everyone the opportunity to succeed on their own blood, sweat, smarts, and tears.
Where’s our high-tech Winston Churchill?
April 21st, 2006
EBay: Evolution or Hibernation
The death spiral is starting for EBay.
First the company announces earnings that would be the envy of any smokestack company, but the stock gets hammered. Guidance is very circumspect, the company admits that its recent inclusion of “online store” listings in auction results has been a failure, and reveals Is there really any organic connection between online auctions, electronic commerce, and making a phone call? that it has new security and verification services in the wings as a result of a rising tide of complaints.
Then the WSJ (subscribers only) and the London Times report that the flea market company has been in talks with the two other also-rans of search—Yahoo and MSN—to try and figure out some kind of strategic alliance to blunt Google. The problem apparently: A cadre of McKinsey dweebs told the brilliant leadership of EBay a few years back that Google would leave them alone. So the company pumped up ad spending on Google only to see the search giant introduce electronic payment and classified ad services—built around Google Base–that threaten its very existence.
Welcome to the 21st century. This reminds me of what happened when Microsoft took over the world in the 1990s. Companies like Sun and IBM and Apple wrung their hands over the firm’s aggressive tactics, instead of trying to build better products, and then leaned on the US Government to do their bidding. Bemoaning a new competitive threat, looking for some grand alliance to fight it off, and generally playing “woe is me” is a prescription for failure. And it leads to big strategic mistakes by searching for acquisitions out of fear, rather than based on opportunity and the right fit.
The problem is simple: EBay created a brand name for itself as a place to go and have a chance at a “perfect” market for anything you wanted to buy. Bid against others, and maybe get a good deal. No more. Now, EBay has lost its way, become a haven for shills and scamsters, forgotten who pays the bills, added thousands of undifferentiated “stores” selling exactly the same things, and introduced a scheme called “Second Chance” that
April 6th, 2006
Apple’s Boot Camp Lollapalooza
For years Steve Jobs has been dancing around an ultra portable computer: flirting with buying Palm; haunted by the failed ambitions of the Newton; criticized for not developing a gaming platform; watching in the wings as Microsoft tried handhelds, tablets, Origami, pen computers, you name it. Apple’s laptops were always appreciated for their design, but they were marginalized by the operating system…and then he succeeded wildly with the iPod, a cross-platform solution.
Can you hear the gears spinning in the guru of cool’s head?
Now Apple announces a tiny software hack—Boot Camp–that is going to revolutionize the portable marketplace, and almost no one gets it. Steve immediately turns the tables on the entrenched sellers of me-too laptops. (Read one tech reporter and former IBM laptop advisor’s take on the laptop implications for the only cogent comments I’ve seen yet.) Can’t an icon get any respect?
The real significance of this dual boot capability is in the laptop universe, not on the desktop. Could it be that the success of the iPod, and the iTunes service, has made Steve realize that the future is in selling mobile devices that are just better than anything else available? What if he could revolutionize the laptop market the way he did the portable music player game? Is it so hard to imagine a Mac laptop that plays video, and music, and gets the Internet, and is just better than all the me-too products from today’s bevy of uninspired competitors? Remember his main reason for switching to the Intel dual core processor? To get better laptop performance. QED.
With this development Steve Jobs has just energized Bill Gates’ dead-in-the-water Windows business, and thrown a grenade into the heart of the PC laptop marketplace—the only sector of that industry to have any margins left. Even better,
April 5th, 2006
Caveat eBay Emptor
I’m never going to use eBay again.
Now this is no material issue to the billion dollar company, since I’ve only bought a couple of things on it over the life of the company. The real eBayer in our family is our eldest daughter, a college student on a tight budget with a heightened interest in getting the best deal on everything. But even she agrees that something is rotten in Denmark. Especially with a “feature” called Second Chance, an official eBay method of bid shilling that might not be illegal, It didn’t have to be this way if eBay had kept focusing on its core product, instead of chasing the grail of growth at all costs. but it sure subverts the original promise of the company.
The real issue here is for shareholders. eBay looks like another Internet company—see this musing on Google—that has taken its eyes off a core business by buying Skype to satisfy Wall Street’s demand for growth at all costs. My evidence? A tale of damaged expectations, misleading descriptions, manipulated bids, colluding sellers, meaningless “feedback ratings”, and financial shenanigans, all of which is part of a recent eBay experience.
It all started when I tried to buy a handbag for my wife’s birthday. She wanted a particular “Prada” one, but since the designer has no store in northern California, we took a look on eBay. I’ve since realized that even used handbags with this marque cost upwards of a thousand dollars, but I naively assumed that a $300 handbag (palpitations!) on eBay was pricey enough to be legitimate. When I saw several dozen “authentic” “guaranteed” “brand new” bags, festooned with glowing descriptions and lots of fancy sounding guarantees—stamped metal and lining logos, “controllata” card certificates of authenticity, etc.– all being auctioned by a bevy of “power sellers” and eBay members with hundreds of positive feedback ratings and their own online “stores”, I figured we had found a great source. After all, eBay, great brand name that it has promoted itself to become, wouldn’t let pirates and scamsters take over their service would they?
So we bid on a bag. As usual (as counseled by our daughter), nothing much happened until the very last half hour, when one bidder pushed up the bid price until it exceeded our “maximum” (the price we had shared with eBay as our limit.) We were disappointed, but philosophical. There were several others on offer after all. One would be ours.
The next morning I was surprised to find an official email from eBay informing me that although I had lost the auction, the winner had backed out and I now had a “Second Chance” to buy the bag for my bid “limit” amount. I was a bit nonplussed that what I had thought was a private amount was now being publicly revealed, and I wondered how the buyer could have decided to back out between Sunday night and Monday morning when the email was sent to me, but no matter. I went ahead and agreed to the “Second Chance” deal. After all, I had been willing to pay that much so what was the problem?
March 29th, 2006
The Cookie Monster in the Closet
Maybe I’m just an old fashioned curmudgeon, but I’m mad as hell and I’m not about to sell my soul to Satan for a slow, free, advertising besotted Wi-Fi service. Am I the only one who objects to the burgeoning AdverNet and the coming of hordes of ads "tailored" to me and my interests? Is the entire web universe populated by advertising weasels, sell-outs, and apologists?
Want to opt out of all the tracking and “metrics” that the network providers are going to be selling to the advertisers? Good luck.
There was a time when “Madison Avenue” was a dirty phrase, smart consumers looked with disdain at the manipulation wrought by advertisers, and the cognoscenti prided themselves on not being taken in by the wiley ways of copywriters and art directors. At the same time journalists took pride in a firewall between advertising and editorial, and kept their skeptical chops in working order whenever any company, or high and mighty luminary, made any claim whatsoever.
No more. Today’s Internet Generation—so sorry, the original Web and it’s malingering bubble step child, the Web 2.0 community—has embraced advertising as its Holy Grail and created a fledgling economy based on manipulating, subverting, and fleecing consumers in ways far more intrusive, and scary, than ever before. At the same time the blogosphere has lost any semblance of veracity—everything is an opinion, irresponsible gossip is reported as fact, fact checking is oh-so-last year, big traffic bloggers parrot the company line while pretending to write analysis—and the line between PR and reporting has blurred to be meaningless. (Check out this blog reporting from uber-Tech reporter Jim Forbes about a colleague’s use of the word “exclusive”, and his follow-up.) And worse, there’s a tacit acceptance of this entire house of cards that has the entire industry pretending that there’s no monster in the closet, while many of the best minds in this generation are feverishly working on ever more sophisticated ways to make advertising the central pillar of our future and create customized advertising that reaches into my deepest personal interests a la Big Brother.
I’m talking about the unquestioned adoption of the religion of the Holy Church of Internet Advertising, and its scary priestdom of “metrics”, whose dominance is destroying the beautiful egalitarianism of the Web. It is about to get worse by orders of magnitude
March 22nd, 2006
Google’s Napoleonic Complex
What is wrong at the world’s search darling? Is the ghost of Napoleon walking the corridors of the Googleplex?
A string of pedestrian products continues to belch out of the Googleplex. The latest unnecessary, ill-conceived, and poorly delivered service is the new Google Finance. I’m not going to bother even criticizing this one in its particulars—if you want to read a detailed dissection check out my former Forbes.com partner Dave Churbuck’s commentary about it…or read the string of disappointed comments by many others that were collected at Memeorandum.
The details of this particular snooze job don’t really matter. The big issue underlying this latest pedestrian effort is deeper: If Google is starting to create and deliver its own content, and will weight its own content to show up higher in search rankings, what does that do to the explicit promise of the company to deliver search results transparently? New but dull, derivative products appear from all sides. Sure there are always those sponsored links, and SEO’s (Search Engine Optimizers) who’ve pored over the fine print have heretofore been able to improve their rankings with some judicious bending/understanding of the rules, but at root we all believed that the search results were scientific and mathematical, and pretty much impervious to “The Fix.”
Now comes this slide down the slippery slope of venality. Many on the conservative side of the political spectrum already claimed Google search results were skewed to the left—and Amazon’s admissions this week didn’t help matters either. With this finance site Google releases a product that promises to deliver a poor simulacrum of financial news, in a way that adds little to what is already available, and will ensure that it ranks way up in the results when you ask for financial news. This is a search engine as publishing platform strategy and very different from the original “blind justice” promise of Google. John Battelle was the first to raise this issue. Is this kosher?
I would argue that it is not. And more importantly, I’d say that it is another example of how the Google Guys have lost their way.
Jeffrey S. Young is the co-author of iCon Steve Jobs. He currently tends a vineyard in Northern California.
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