Rudelle Blogging

Following the announcement of the partnership between eBay and Google at the end of last August, eBay stock has gained a steady 1.86%. However, on second thoughts, this giant deal seems rather surprising.
What is really behind this deal? As with Yahoo! for the United States, the king of auctions chose Google to fill its international sites with ads. This astonishing decision will create a new form of competition for all the small sellers on eBay. While seeking for a new revenue stream, eBay takes the risk to angry its most valuable asset: those thousands of small eBay sellers. It is likely that the recent pressure on eBay bottom line has push toward this delicate choice.
The other part of the agreement is also symptomatic. The deal consists in developing with Google a common click-to-call offer on its site, by leveraging on Skype. The trouble is that most click-to-call experts say that the vast majority of customers (almost 85%) prefer to use landlines rather than computers to call. Thus Skype ends up to be rather a barrier than anything else for the deal.
This seems to illustrate the difficult integration of Skype into eBay. Skype is a formidable telephone operator. Its economic model of voice over IP is very strong. On the other hand, synergies with eBay are far from obvious. That is for two reasons.
First able, a large part of Skype customer base is located in Brazil and India, that is to say very far from eBay customer base. The second reason is that allowing buyers to call sellers (which was the main rational of Skype takeover in the first place) was not welcome by those very precious sellers. Indeed, sellers are already having a hard time to cope with all the emails from buyers. The idea of having to answer buyer queries by phone gives them nightmares.
The future of eBay seems rather in pushing quickly towards Web 2.0 and smart collaborative filtering, as is doing Amazon. By offering a much more systematic usage of its fabulous “Long Tail”, eBay will greatly boost its powerful community of sellers. And as a result, securing its long term bottom line.

With the opening a couple of weeks ago of Writely and the launch of Google Apps, Google takes a new step to offer a complete Office solution. There was already Google Spreadsheet versus Excel, Google Calendar and Gmail versus Outlook. With Writely versus Word, it still needs to offer (soon) a clone of Powerpoint and the panoply will be complete.
The idea is of course to offer a credible alternative to the 800 pound gorilla Office. And in the backstage, with the will to challenge, via Office, with the very principle of traditional PC (which made and to still make the fortune of Microsoft).
Is this strategy poised for success? I move on quickly on the fact that this supposes to have a permanent high speed connection each time one wants to work. With the generalization of Wifi (and soon of Wimax), it is reasonable to think that within a few years, high speed Internet connections will be as usual as electric plugs.
The problem of Google is above all to fight against the inherent inertia of any user. To make a user change his habits (what an absolute horror), one should offer enormous incremental value. However on the functional side, even overpowered with Ajax, Writely remains definitely below Word. But, given that 90% of users master 10% of Word functionalities, it is not really important.
Paradoxically, the interest of Writely lies in fact within two characteristics not connected with the text processing itself: centralized data storage (which protects from the system crash) and the option to share a document among several users (a little like a wiki).
Will that be sufficient to lure tons of Office users? In the short term, that appears not very likely. Indeed, the concept of centralized data storage is challenged by spectacular progress of external flash memories, say nothing of the delicate issue of data privacy. To accept that all ones private and professional life be to stored by the king of keyword search, implies very strong trust. Regarding sharing documents, even if this functionality is rather extraordinary, its usage is justified only in very specific (mainly professional) situations.
In short, Microsoft should concentrate at last on the eradication of its eternal crash issues (which still occurs too often on Word) rather than on endless increase in new functionalities. And if in addition, Microsoft keeps its soft policy on licences, Office should be able to resist fairly well against Google new assault.