Sunday, April 23, 2006

 

ebay to create an anti-Google coalition?

An article published in The Wall Street Journal on Friday, April 21, 2006 hints that eBay is talking with Microsoft and yahoo about possible closer cooperation to counter the threat that it sees from Google (specially with Google Base). We would expect that eBay would do precisely that as part of how it competes to win in the network era.

WSJ reported that:
After years of working closely with the search giant, eBay last year became alarmed as Google started assaulting its turf in multiple ways. In one case, Google launched a classified-advertising service that competes directly with eBay's online auctions and other listings.
This is clearly the area of competitive threat for eBay.

WSJ further rerported that:

Upon hearing of eBay's talks, Google, Mountain View, Calif., offered an olive branch, in the form of a series of proposals designed to tighten the relationship between the two companies. The superiority of Google's search technology makes it a better place to advertise, say people familiar with eBay's thinking.
eBay needs Google's search technology to make its core business perform better. At the same time, Google is using its search technology to extend into its customer (partner)'s core business.

Who needs who more? the relative power position is clear in the short-term: Google is in the driver's seat with its search engine technology. Think back to our discussions of network era through layers of caoabilities with competitive and cooperative linkages. The ideas are applicable beyind hardware-software stacks!

This illustrates a key challenge in the network era: How best to straddle the competition-cooperation boundary? in other words: how to manage the paradox of tight coupling between firms?

Managing the portfolio of relationships to access a portfolio of capabilities is more central than ever before.





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