I had the pleasure of being interviewed a few times by the authors of “eBay and Google: A Coopetition Perspective,” a term paper of sorts written by two Haas School of Business 2006 MBAs (they both graduated this year). Despite my participation, Julien Decot and Steve Lee have written an insightful and data-packed paper – 44 pages in all – that exhaustively details how Google and Ebay depend on each other, and what stresses the two companies’ relationship will suffer as they increasingly find themselves in competition.
In fact, as they researched the paper over the course of the year, the authors came to the conclusion that eBay had no choice but to ally with either Yahoo or Microsoft. Then the Journal reported as much, and the Yahoo/eBay deal went down.
If you love data (they estimate 12% of all eBay traffic comes from Google, for example), financial analysis, and competitive scenarios, this paper is for you. There is an entire section on “next moves” which I also recommend. The authors have allowed me to post it here (PDF). They would very much like to hear your take on it. Remember, this is the work of students, not industry experts, but it’s quite valuable nonetheless.
Some typical analysis from the paper:
“(the) main takeaway from our analysis: assuming the profit margins from their current businesses remain similar to their current level, or worse, if they face increased margin pressure, it is pretty likely that eBay will consider seriously entering the online advertising market at this point….
…Based on our high level projections, we can foresee a mismatch between demand and supply
that could possibly induce some price pressure on Google’s core ad market. Moreover, in order to
reach revenue levels built into Google’s valuation, Google will have to enter markets outside of online ads.”
Sure, you could argue that’s obvious, but it’s sure nice to see the data laid out, and the arguments made, and there’s a lot more to the paper than just that. The authors did a lot of original research (like the graphs above showing customer segmentation), and peer into markets where both companies might logically strike next.
The best part about this? After graduation, the authors are going to work in the Valley – one for eBay, the other for … Google.