I was giving a speech a few weeks ago when something a business owner said just stopped me in my tracks. "I am still in denial about the Internet," he said. "I keep hoping it will go away and we can just get back to business as usual."
Sorry, bud. Denial isn't going to do you a bit of good. Welcome to 1999, where the Internet is here to stay. There is no use hiding under a rock, unless you want to stay there and rot. And if any of us need further convincing that the Internet is here to stay, we should study the current deal du jour with eBay and Butterfield.
For those of you that are still in hanging out by the pyramids, eBay has become the largest and most successful online auction site. At least for the moment, until Amazon blows past them. eBay is operating in the black, taking a small percentage of the millions of geegaws sold daily on their site. Butterfield & Butterfield is one of the largest auction houses in physical space, selling lots of fine art and other pricey items. The story is that eBay is buying Butterfield, not the other way around. Given eBay's market capitalization of over $20 billion, they can afford to chip off a piece of that and pick up Butterfield. I think this is a good deal for both companies, and a nice illustration of exactly how the Internet has entered the mainstream.
With this deal, both companies have branched out and should be able to attract a new clientele. By association, Butterfield gains immediate legitimacy as the premier auction house, too, and looks smart for joining forces with a strong competitor. They were never going to grow past Sotheby's and Christies (the Coke and Pepsi of auctions) on their own.
Now, I am not much of an eBay visitor, I'll be the first to admit. I've been on the site now and then, trying to understand what is it about selling "collectables" (otherwise known as junk) that is attractive. While it isn't my style, it does have a strong following. (P.S. And now Silicon Valley engineers are getting into the eBay act. An entire team is up for grabs, opening bid $100!) Its profits are surely the best eCommerce story going, now that the novelty of configuring Cisco routers and Dell PCs has worn off.
With this move I think we can mark the entry of eBay into the hollowed halls of portal-dom. My notion of a portal, as a major web destination site, hasn't changed much since I first wrote the "Portal, Schmortal" essay about a year ago.
But in the past year the players have changed. I think we can all agree that AOL, Amazon, eBay, Microsoft and Yahoo are portal players. (The list of acquired companies for this group is a long one, indeed.) Perhaps a better definition of portal would be a company whose stock is flying so high or who has so much idle cash lying about that they can afford to buy whomever they want, and are a popular destination for budding Internet entrepreneurs looking to sell out. No denying that.
David Strom
david@strom.com
+1 (516) 944-3407
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