Umair Haque / Bubblegeneration
umair haque  


Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Tuesday, June 21, 2005

Google vs PayPal

OK, not much time to write about this so I'll make my (controversial) thoughts short and sweet.

Google's core competences are not about connecting people with other people. They're about connecting people with information, by rapidly learning what information domains people value most. In the past, I've referred to this as Google's learning capability, and it's (supply-side) economies of scale.

Where's my evidence? Well, let's think about Google's product portfolio. Most of it's products which are focused around connecting people with other people are the ones people love to pick on. Examples: Blogger, groups, etc.

eBay, on the other hand, does have probably the world's deepest competence in connecting people with other people to do productive things. Where is this competence manifested? In eBay's seamless integration of the online marketplace. Now, this is a lot harder than it appears, because it's exactly the gaps in the value chain that eBay had to come up with innovative solutions for - reputation systems to fill the information gap, the PayPal acq to fill the transaction cost gap, etc.

Anything can happen - and I certainly wouldn't write Google off. The point I'm trying to make is that, IMHO, AdSense has not built a competence that's hugely relevant to consumer micropayments/credit. eBay's the player that's built that competence, by learning a huuge amount about how to connect people with other people.

You might also wanna keep an eye on Zopa.

-- umair // 10:41 AM // 0 comments


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