Groupons Rise and eBays Decline

By Eric Jackson

(Choice snippets, be sure to read the entire thing. ^)

...This environment should benefit eBay, as well. While pop culture portrays eBay as a site populated by collectors and hobbyists, small businesses have always been the backbone of its sales. The auction site left behind its Beanie Baby past in the late-90s as so-called "power sellers" - small businesses who used eBay as a primary distribution channel - flooded the site with electronics, computers, and even automobiles....


...The reasons for eBays stagnation come down to leadership. During former CEO Meg Whitman's tenure, the companys culture became increasingly bureaucratic, and improvements to the site became few and far between. eBay hiked fees aggressively while doing little to improve it's user experience.

The company misjudged the threat posed by Google's advertising network, which effectively decentralized ecommerce by making it viable for small businesses to sell directly from their websites.


Also, as my former PayPal colleague Keith Rabois asserted, eBay started out as a fun, social ecommerce site but it failed to grasp the advent of social networking. As sites like Facebook and YouTube offered consumers new venues for amusement, eBay failed to adapt and actually became less fun....