Will Ebay Matter in 5 Years?

Ebay is on a slippery downward slope and will become irrelevant if they are not careful.  “super CEO” Meg Whitman hasn’t been able to solve their problems and whoever their new CEO is, they haven’t done much of a job either. (I don’t have much respect for Meg, I think she was just coasting on the momentum the original founders got for the company).

Its interesting to contemplate because ebay has been such a standard powerhouse on the internet.  But they may not be in the future.

There was some interesting posts on Digg today, linking to this article on the consumerist “It’s Now Completely Impossible To Sell A Laptop On Ebay”:


Go read it.  Its about how pervasive fraud is now on ebay, making it very difficult to sell things.

And this post on Digg really made me think (excuse the language; I’m posting as it was written):

+287 diggs   by RevJonathan 9 hours ago
Dear Google,
Please make an eBay competitor for fucking fuck’s sake.
View 10 replies to this comment (most popular has 49 diggs)


People trust google more and want google to make a marketplace that actually works.  This whole market is wide open again.

I think this is fairly easily solved by Ebay.  Yeah, I know, I’m a consultant living in the Caribbean and don’t know anything.  Well try this out:  ever heard of the concept of a “distributed trust network“?  No?  Ok, what it means is that trust can be distributed around a network of objects.  It was the basis of Google’s success – before google existed, search engines returned results based around text on the page.  Google looked at links to pages and used those to determine the overall relative importance of a page.  It was a major breakthrough and is now known as “pagerank”.    A site like Linkedin is based on it – I am able to see people 3 degrees of separation away, and know that there is some level of trust since they are friends of friends of friends.  They’re the backbone of friend of a friend sites like myspace, facebook and hi5.  We use the same principle in the real world all the time when we ask a trusted friend for a recommendation.

Distributed trust networks are a foundational concept on the internet.

Ebay never bothered implementing a distributed trust network on its feedback mechanism and its time they did.  Basically this means applying some kind of social networking – “friends trust each other” network for feedback, both for buyers and sellers.  Therefore if a new user comes on to the system and has 100 positive feedbacks, but they are all from overall untrusted people, it has little value.  If a new user joins the system and is immediately trusted by 10 really important people, it will have far more weight.

If Ebay can’t find a way to do this, the entire ebay ecosystem will move over to sites like facebook, where trust is implicitly built in.  We *know* who our friends are.  And maybe our “trusted” friends will include 5 levels deep, so we can get a variety of things to purchase and sell.  And if one of your friends starts selling fradulent things on it, you’ll hear back about it.  Just like in the real world.

And do you want to go adding friends on facebook that are Nigerian and want to buy laptops? (per the above link).  I don’t, nor do I want to introduce them to my friends.

I recently interviewed the founder of Shopit, Matt Hill.  He is tackling this exact market, and may really have something on their hands.