eBay Inc.’s John Donahoe Discusses Shifts in Retail at the Web 2.0 Summit

By: eBay Inc. Staff

“Consumers are driving enormous change in how they shop and pay,” Donahoe said.

Standard approaches to retail are “crumbling stunningly fast,” said eBay Inc. President and CEO John Donahoe at the Web 2.0 Summit in San Francisco held on Oct. 17 - 18. John Battelle, Executive Chairman of Federated Media and one of the founders of Wired magazine, interviewed John on stage at the influential technology conference.

A Changing Retail Landscape

"The boundary between online and offline is blurring," Donahoe said, adding that in the past 18 months, half of retail transactions involved the web, whether through product research, price comparisons or actual transactions.

These consumer trends have broad implications. “Retailers need help,” Donahoe stressed, noting that eBay Inc.’s new open X.commerce platform can help merchants leverage mobile, social and local channels to reach buyers.

While ecommerce is a $325 billion market, the overall retail market is roughly $10 trillion, Donahoe said. “What we see happening in the world of shopping and payments is somewhat analogous to what has happened to digital media. Consumers are driving enormous change in how they shop and pay.”

The Rise of Social Commerce

Battelle expressed special interest in eBay Inc.’s strong relationship with Facebook, citing the fact that Facebook executive Katie Mitic has joined the company’s board of directors, and highlighting the integration of Facebook’s Open Graph into the company’s global commerce portfolio.

“Social commerce is right at the beginning,” Donahoe said. “If you think about it, shopping is a very social experience in the offline world. You go to the mall with your family and friends. Online, the social experience and the shopping experience are fairly separate. In 12 months I think you’ll see lots of seeds growing, and 36 to 48 months from now, you’ll see some great examples of social commerce.”

No Zero-Sum Game
Battelle asked Donahoe about competition from Amazon, Google and possibly Facebook. “The story of the web is not one of zero-sum competition, “ Donahoe replied. “So we don’t spend a lot of time worrying about that. We spend more time asking how we can innovate around our assets.”

“Google has a tremendous advertising platform,” he added. “Facebook has a great social platform. eBay and PayPal have a great shopping and payments platform. And network effects are powerful things.” Donahoe cited the fact that PayPal has 100 million active digital wallets today, and that PayPal has been cloud-based from the beginning. “We’re focused on driving PayPal forward and taking it to the mobile device and offline world,” he said. “We feel good about having a strong starting point in shopping and payments.”

Information Week has posted a video replay of Battelle’s complete interview with Donahoe. Matthew Mengerink, eBay Inc.’s Vice President and General Manager of X.commerce, is also speaking at the Web 2.0 Summit on Oct. 18.
Meanwhile, many media outlets have covered Donahoe’s discussion with Battelle, including these:

• "The boundary between online and offline is blurring," Donahoe said. — San Francisco Chronicle
• “Donahoe said his company has set up an open commerce platform so that eBay can essentially become an operating system for commerce.” —VentureBeat
• “eBay [wants to] enable commerce for all retailers, helping them enter an era of commerce that growingly begins and ends online, and an era that clearly also involves mobile devices.”—Information Week
• “John cited large retailers, in particular, as merchants who are trying to figure out how to take advantage of mobile technology.” — ZDNet