According to Amazon.com, Zyda was a trusted member of a “select
inner circle of top executives” and it fears that Zyda’s “intimate
knowledge” of the on-line retailer’s “most confidential business
plans” could allow eBay to siphon sales off Amazon.com’s core
market.
Presently, both companies are looking for ways to increase
revenue despite an economic slowdown and are stepping on each
other’s toes in the markets they are addressing.
David Kathman, a Morningstar analyst, speculates,
“Amazon and eBay are both leaders in their
respective niches in e-commerce. Amazon Auctions hasn’t been a
total failure, but it hasn’t been as successful as they hoped. EBay
meanwhile still dominates the auction world and has also been
getting into fixed-price selling. Amazon may be getting
concerned.”
EBay has been explicit in targeting Amazon.com’s core market.
Chief Operating Officer for eBay, Brian Swette, recently declared,
“We’re the no.1 in all categories except books, movies and music
and we hope to be a leader in that category.” The same category
that has been the core of Amazon.com’s market since the company was
founded in 1995.
Compounding the competitive onslaught is an Amazon.com - eBay
race to build a new generation of web storefronts, outlets where
new products can be offered at fixed, heavily discounted prices.
Both companies see on-line storefronts as a necessary step towards
ownership of an e-commerce “platform” that will serve as a retail
model for the entire internet.
This marks a departure, for both companies, from their present
mode of selling which largely involves overstocked inventory or
selling used items to the highest bidder. Instead, Amazon.com and
eBay hope to focus on facilitating transactions for brand name
storefronts, discount outlets, person to person auctions or any
other form of commerce.
Inevitably, the market may not be big enough for both
competitors. “The big carrot is who’s going to be the platform that
retailers sell from. At some point down the road they could
collide,” commented an analyst for Deutsche Bank.
