Marc Canter has an unmissable statistic:
Did you know that 45% of all of eBay’s listings come in through their APIs?
As you might remember, at Sprint we were trying to open up the wireless side into an open technology and business platform. It failed, mostly for lack of a cultural imperative to drive in that direction.
Ebay’s business comprises two stages: someone lists an item (eBay gets paid for this), and someone buys the item (eBay gets paid for this too). They’ve taken all the friction out of the first half of their business. No human necessary! Only the actual purchase still requires a human click, and it can’t be too long until the shop-bots start to change that too. (Although we’re part-way there already.)
Now think about the traditional telephony business. I have to dial, you may have to answer. Voicemail part-automates the answering, generating more metered minutes. But you have to ask yourself: is it really the best you can do? Is it impossible to broaden the business model — temporary buddies, address book access, directory, etc.? Can’t you deepen it too, and automate previously manual business transactions via APIs?
If I were a telco investor, one of my key criteria of comparing the various “voice nets” (PSTN, mobile, Skype, open SIP, etc.) would be the existence, quality, adoption and economics of the APIs.
UPDATE: You can bet that a lot more than 45% of eBay’s margins come from these transactions. And note how their business model has no upper bounds imposed by human action; an automated voicemail answer still requires a human-initiated phone call. Now, start to imagine your voicemail box (with a sensible UI) as your “RSS feed of the most important stuff” like customer service messages from your bank. Et voila! You have a platform business.
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Amazing #. Thanks.
Just facinating. If you haven't embraced the everybody's a platform, get over it, mindset then you might get your panties in a twist about how eBay has been intermediated. They are no longer in as direct contact with their users.
But this woke me up. In my house we both buy and sell on ebay in very small quantities; but continously. We buy with sniping bots, we post things for sale with desk top software. Yet we do plenty of pages views at eBay. So we have "relationships" with three vendors around around this marketplace.
Presumably after the innovators finish searching the search space around eBay for any particular function eBay has the option of pulling any profits back into their platform; as landlords always do.
Posted by: at February 23, 2006 01:22 PM