Amazon v. eBay: Battle to the Death

Taking a break from the battle of the search engine advertisers (which is getting boring anyway, unless of course, they're rapping), let's take a crack at trying to understand what's going on in the world of e-commerce. Yes, e-commerce. It's not as pretty as search, or contextual advertising, but it's kind of hard to ignore.

Despite the crappy economy, people are still buying stuff – and perhaps because of it, they're turning to the online channel. Think about it: You get all your choices right in front of you, when you want them, and you don't have to drive anywhere! Sure, the cost of shipping may go up because of higher fuel prices, but since you're not actually seeing your own gas needle dip, it's like it's not even happening.

But let's skip over all of those middle conclusions about how e-commerce is so, so resilient to a faltering economy, and get right to the playa's.

eBay's third quarter results were disappointing and Q4 doesn't look like it's going to be much better, InternetNews reports. Under pressure to compete with Amazon, the company started focusing more on fixed price sales rather than the auction/marketplace model that it used to grow its wings. It also started pissing off sellers with new fees and regulations. And then, lo and behold, 10% of its 15,000-person workforce is shown the door. Oops.

Amazon, on the other hand, has committed no such travesty – and apparently profits are up 48% from Q3 last year, writes Retailer Daily. Revenue was also double-digit-y, squeezing out 31% more from consumers. However, much of this revenue was not from Americans – Amazon is capitalizing on foreign markets like the UK, Germany, Japan, France, and China. (Amazon's biggest American fan might just be Oprah.)

You gotta wonder what's going to happen when the spending slowdown starts affecting those markets as it's been hitting us for the past year. I think Amazon's wondering that, too: It gave a glum Q4 outlook as stock prices plummeted last week, down even more from the 40% plunge from the past two months.

eBay's stock has lost half its value so far this year. Ouch.

Brad Stone from the NYT shed some light on the situation:

"While
eBay was buying into classified advertising, online payments and
Internet telephony, Amazon spent hundreds of millions of dollars
building its brand as a trusted retailer – hiring customer service
representatives and returning money to customers when transactions went
awry."

I think he's leaning more toward Amazon, don't you? What do you think? Where are these two e-tailing giants going? All the way? Or to the grave?

In case you're thinking I made a typo in the title, think again. This battle is worthy of any Supreme Court.

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