Sunday, October 14, 2007

Amazon/Google/eBay/Facebook vs. Microsoft/mySpace/Sony...

I would say that the core competency today is the ability to create a sustainable ecosystem where all(most) participates can gain either monetary or non-monetary benefit. If can achieve that, then as the "god" of this ecosystem, sure you can gain more. Thus, I don't think Yahoo failed because of Google's introduction of AdWord but its failure to create such an ecosystem around its massive property. Microsoft is falling because it's canalizing its previous ecosystem, Windows + 3rd party application developers, while didn't create a strong enough new ecosystem in new territories such as Internet. Microsoft has some reasonable success in the new home entertainment ecosystem with XBOX, to be fair.
That's why Google and eBay are so successful because there are way more people/business making money within their ecosystem. And that's where Amazon is heading to I think. Amazon opened its ecommerce platform to anyone want to do online retailing and now open its AWS system to any Internet company wants to save money. Facebook is heading the same way by launching its F8 platform and what's also where MySpace is lagging behind.
Indeed, the same reason why so many more people care about the environment today.
MBA Class of 2008
Babson College
Skype: cefs99

From: on behalf of Joseph, Vivek Nicholas
Sent: Sun 10/14/2007 12:30 PM
Subject: RE: [Babson_TechTalk] News and Information from Factiva


Thank you.

Yes, Amazon is helping the small stores & yes, small stores will gain. But what is Amazon getting out of it? It has to invest in infrastructure for all these guys & the same infrastructure can be provided by others like google/ebay also. I don’t think sellers are going to be loyal only to amazon if ebay/google/ms come up with the same idea. What I am trying to see or discover is, what should Amazon do, to get better of the new players who might enter the market? How can Amazon go one up, always.

The biggest advantage AMZN has for now is that they have the customer base. If they can turn more sales revenues from each customer, that would help them immensely. (Wall St would hike its price by another $50 maybe). But how can they do that, for one. Second, if Google/ebay comes in, how can AMZN retain its customer base (both sellers & buyers) & prosper? (Currently they are spending cartloads of money on the infrastructure & I don’t see it giving them a great ROI as of now. How long should they wait for that is another question)

Any thoughts?


Vivek Nicholas Joseph


From: [] On Behalf Of Meenakshisundaram, Alagappan
Sent: Sunday, October 14, 2007 12:11 PM
Subject: RE: [Babson_TechTalk] News and Information from Factiva


Amazon wakes up one fine day and says ‘ok hold on guys, what is our core competency? A robust infrastructure and proven business model. Ok now how can we increase our revenues? We are already selling all products we can get hold of. So lets help others sell a product and convert this into a service model so that we can leverage our biggest expense – R&D and maintenance’.

I think Amazon is taking down a barrier to entry into commodity markets for small businesses – payment / storefront infrastructure.

In effect, they are replicating ebay’s service. But they are also running risk of one big downside – they can potentially dilute / damage the brand image and customer confidence they have built over the years online.

Ebay has also coming up with an interesting social network for buyers. Check it out.

Thanks and regards


MBA Class of 2008 | Babson Fellow | Babson College

Cell |

From: [] On Behalf Of Joseph, Vivek Nicholas
Sent: Sunday, October 14, 2007 11:41 AM
Subject: RE: [Babson_TechTalk] News and Information from Factiva

Thanks Firat & Li.

First of all, I don’t agree with wall st on valuation. But now I know why the stock prices are insane. That apart, I was wondering if the business models of Amazon and/or ebay are sustainable. (I talked a lot with Prof.Marty about it. He thinks that Amazon’s current foray into AWS is not all that exciting, but I am not sure if I agree with him). What do you guys think?

Background: AWS is a service where any third party (like you & me) can sell products on Amazon. They charge a flat fee of ~$40 a month & also charge a commission/sale. The shipping is the responsibility of the merchant. They have storefronts now for target & the like & they are expanding.

The question I have is, what can Amazon do, to have an advantage over the rest? I ask this because, all they are doing currently is providing an infrastructure for everyone to have their stores. Tomorrow, Google can do it too & ebay is almost there. They would have no problems in coming into this domain. So, what can Amazon do, (other than having the customer base), to have an advantage over others? (International competition just adds to the problem, but this is just the start of a discussion)

Thoughts? Did what I say make sense?


Vivek Nicholas Joseph


From: [] On Behalf Of Ozpinar, Abdullah
Sent: Thursday, October 11, 2007 2:28 PM
Subject: FW: [Babson_TechTalk] News and Information from Factiva

Following on this, we were doing E-bay for last week’s class and there were several growth drivers. I think they somewhat apply to Amazon to some extent so here they are.

First some industry numbers:

Within the U.S. electronic shopping and auction industry, the growth rate has been in the low teens with revenue growing at 13.1% in 2006, up from 11.4% in 2005. The two major product categories are computer hardware and clothing and accessories, based on percentage of industry revenue. The percentage of online consumer spending that is conducted online as compared to traditional retail is 6.5% excluding travel in the US and expected to increase to 10% by 2011. The global e-commerce growth is expected to be around 15% over the next five years. Global penetration is 2% and expected to double by 2011.

Then some growth drivers:

1- Rising barriers of entry (Although it is relatively easy to form similar sites, E-bay (and also Amazon) has established very strong brands.

2- Increasing global growth and cross border trade.

3- Weaker dollar contributing to earnings of companies with international operations.

4- Increase in the use of social networking sites with potential collaboration opportunities (how is this for BS?)



From: [] On Behalf Of Hong, Li
Sent: Thursday, October 11, 2007 1:53 PM
Subject: [Babson_TechTalk] News and Information from Factiva

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Why ebay and amazone stock price are up recently ?

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