Shrikanth G

CHENNAI, INDIA: There is a profound shift happening on the online market place and eBay is determined to dominate it. But the last two years the recession globally and eBay's acquisition of Skype created an impression that the company was fraying out of its core focus area - online retailing and connecting buyers and sellers. But with series of strategic decisions like selling 70 per cent of Skype and a slew of other synergistic acquisitions like GMarket in Korea, Shopping.com, StubHub and classified sites such as Gumtree and LoQUo has brought eBay back on the track. Much of the turnaround is credited to John Donahoe, who took over as President and CEO of eBay in 2008 is bullish about eBay's domination in the online market place. In an exclusive interview to DATAQUEST, Donahoe credits the strategic role its India development center in Chennai is playing and enabling eBay becoming a more technology driven company. Excerpts

Q: You took over from Meg Whitman two years back- since then what has changed and what's not?

The core strategy of the company has not changed a bit-connecting buyers and sellers. We have created huge opportunities for people which did not exist earlier. For instance today by using eBay an artisan in India can sell his produce globally. What has changed however is the environment-the internet, ecommerce, and online payments as a result of the competitive industry environment. So we are morphing ourselves to better meet these changes.  My Job at eBay is to apply the core values of the company  and what I am doing is making eBay becoming a more technology driven company and I believe that is essential for eBay to continue provide rich customer experiences around the world.

In being more technology driven, I have to say here that the Chennai ODC is playing a critical and strategic role in developing products that are deployed across eBay globally. One of the significant things we did was in opening up our platform for developers-the PayPal X which is the first open global payments platform. This was fully developed ground up from our Chennai facility and it's the first payment system in the world that opened up for third party developers. These are some of the things that have changed and PayPal X is a great example.

Q: Isnt's it just offshoring...

Many people ask me whether we came to Chennai for cost economies. May be it was true five years back. But over the span of five years our Chennai development center, the largest for us outside eBay San Jose, is playing a critical enabling role in our technology driven initiatives. We have 1400 engineers who play technology as well as leadership roles.

Many in the industry have criticised on eBay's acquisition of Skype due to lack of synergies...
We have well laid out acquisition strategies. We do acquisitions that strengthen our core business and the ones that hasten our skills. But Skype we found out had some synergistic issues hence we sold 70 per cent of it and retained 30 per cent. If you look at other acquisitions like GMarket that we did in Korea and Israel based Fraud Sciences and host of others – they all have redefined our competencies. We have a very clear acquisition strategy and we do companies of all sizes like the one we did recently – a small iPhone apps company Red Laser.

Q: How do you see the big shift to mobile?

Mobile commerce indeed has very big potential. We are by far the largest mobile commerce company in the world. For instance eBay iPhone/iPad apps has seen phenomenal uptake. Take the case of the Bump App (Money App) - in which one can bump money using the mobile phone. The lines between online and mobile is blurring it's more of customer choice and how we are enabling those choices in various form factors. The iPhones according to me has changed the whole mobile space and consumers started using mobile in many innovative ways. I believe by 2013 more than half of the online transactions will be done out from a mobile phone leading to huge spike in M-Commerce.

Q: How relevant is PayPal today given other payment options like Credit card etc.?

Well it rides on top of the global banking system. PayPal is clearly the safest and the convenient way to pay online. It's safe because you never share any financial data and its custom made for eCommerce needs. For instance globally PayPal handles 68 per cent of eBay's volume. PayPal obviously is bigger than eBay as it handles non-eBay sites too, and eBay is one of its consumers and that is beauty, convenience and the pan global footprint PayPal  provides for eCommerce.

You talked about the competitive environment, so what are the things that differentiate eBay in the online market place?
eBay is different in many ways. We are not just a retailer of selling goods online.  The secondary market is our sweet spot. Many retailers use eBay to liquidate excess inventory of products that has been replaced by newer ones in the market. Say a mobile phone model  launched 18 months back will be found in eBay at a great deal. It's new but an older model. The other kind of stuff you find in eBay is almost new products like a mobile phone with some minor issues like its 'box in open condition'. Anyways you look at its great value for the consumers- for both the buyer and the seller. The secondary market is great opportunity for us as well as to retailer and we are bullish on that segment.

Q: Phishing is one major problem how are you dealing with that?

I must say the incidence of phishing of PayPal and eBay sites have come down due to the proactive measures we have taken the last few years. The Chennai development team has worked on this area aggressively thereby hastening safety and security. For instance the green tab on the browser signifies it's a genuine PayPal site. In addition we have instituted whole lot of anti-phishing mechanisms on our sites that ensure great level of trust and safety.

Q: What is your vision for India?

India is one of the most important markets for eBay , the level of technology leader ship our Chennai development center provides is critical for eBay globally. It is outstanding product leadership. As a market, we are a leading eCommerce site in India with over 2.5 million registered users. All listing in India offer paisa pay secure online payment. At any given point in India we have over 400,000 live listing on eBay India. We will deepen both the technology as well a market commitment here and India development teams will play a significant role in eBay's technology leadership.