* E-commerce giant revives X.com from PayPal’s early days
* New division aims to drive more activity on eBay, PayPal
* Adobe’s Omniture, Kenshoo, Outright sign on as developers
* ‘Pulling an Apple’ by casting wide net for developers
By Alistair Barr
SAN FRANCISCO, Sept 16 (Reuters) – Ebay Inc (EBAY.O) is
building a new division to woo developers and attract more
merchants as the company tries to emulate the success of Apple
Inc’s (AAPL.O) iOS platform in the e-commerce world.
Ebay’s main business is still its giant online
marketplaces, which bring shoppers and sellers together. The
company’s other big division is the payment business PayPal and
it acquired GSI Commerce earlier this year to add a third
division.
But a fourth business has emerged in recent months called
X.commerce. The website for the division, X.com, revives a name
from the early days of PayPal, when it merged a competing
online payments business called X.com started by Elon Musk.
X.commerce is trying to persuade outside developers to
create applications, or apps, for merchants looking to sell
more online.
The apps can be designed to work on eBay’s marketplaces.
They may also include payment capabilities from PayPal and work
with websites built on Magento, an open-source e-commerce
company that eBay bought in June.
The more useful apps that developers build through
X.commerce, the more likely merchants are to use eBay’s
marketplaces, PayPal’s payment technology or GSI’s e-commerce
services.
“The idea is to indirectly monetize eBay’s main assets
PayPal, GSI and Marketplaces,” said Matthew Mengerink, the eBay
veteran who runs the new division. “X.commerce is in a unique
position. I don’t have to drive revenue, I have to drive
traffic.”
Ebay has about 725,000 developers registered with its
various developer programs and there are roughly 4,600 Magento
apps active on X.com, up from 3,800 at the start of the year,
according to Mengerink.
Omniture, a unit of Adobe Systems (ADBE.O), Kenshoo, an
online marketing software company, and Outright, which makes a
financial-management product for small businesses, are among
companies that have signed up to develop apps on X.com.
“They’re pulling an Apple, calling on the collective power
of the developer community,” said Bill Smead of Smead Capital
Management, which counts eBay as one of its largest holdings.
Apple iOS is the operating system for the iPhone and iPad.
The company has a massive following of developers who churn out
thousands of apps for those gadgets, making them much more
useful for customers.
Mengerink reckons X.commerce can be more attractive for
developers than iOS because merchants are willing to spend more
money on useful e-commerce apps.
Mengerink said he will measure X.commerce’s success partly
on how much money developers make selling apps.
“Apple’s iOS isn’t profitable for most developers,” he
said. “On Magento, for every $1 we make, the developer makes
$15.”
“If developers are making the money, you can’t shake the
platform,” he added. “We believe we can create the largest
ecosystem.”
Smaller merchants will not have to hire lots of in-house
developers if a wide variety of e-commerce apps are available
to buy and plug into their online stores, Mengerink explained.
The success of eBay’s new division will depend on how large
and attractive the pool of end-users is to developers,
according to Stephen O’Grady, principal analyst at Red Monk, a
technology industry analyst group that focuses on developer
communities.
Other specialty online marketplaces have sprung up in
recent years, such as Etsy, cutting into eBay’s dominant
position, O’Grady noted.
“But eBay is still a major center of gravity,” he said.
“For developers that’s still attractive.”
Another important ingredient for attracting third-party
developers to a technology platform is ease of use.
Dan Shahin, a former comic book store owner who has
developed an online storefront management system, went with a
Google Inc (GOOG.O) payment system a few years ago, rather than
PayPal.
That was because PayPal had several different application
programming interfaces, or APIs.
APIs are sets of rules and specifications that help
different software programs communicate with each other.
PayPal’s APIs were “scattered around,” making it more difficult
for Shahin to develop payment features to include in his
storefront management system, he said.
Shahin told Mengerink about this and the eBay executive got
to work fixing the problem.
“Third-party developers had to register for each API,”
Mengerink said. “The X.commerce goal is to have one place to
register for developers and partners. There are security and
other issues with this, so it takes a while.”
X.commerce is promising a lot, but Shahin reckons eBay has
the technological chops to pull it off.
“If anybody can do it, they can,” Shahin told Reuters.
“Matthew is not one of those suits. He’s the real deal.”
(Reporting by Alistair Barr, editing by Matthew Lewis)
