October 12, 2011, 10:22 PM EDT
By Danielle Kucera
(Updates with analyst comment in sixth paragraph.)
Oct. 12 (Bloomberg) — EBay Inc., the world’s largest Internet marketplace, unveiled tools designed to increase the use of its commerce and payment services on Facebook Inc., the biggest social network.
The move will make it easier for developers to share their work and give them a say in the evolution of so-called social commerce on Facebook, said Matthew Mengerink, general manager of X.commerce, EBay’s developer and merchant business. Programmers can use X.commerce to create applications for buying, selling and sharing preferences on Facebook’s site, Mengerink said.
EBay Chief Executive Officer John Donahoe is expanding the company’s reach beyond merchants and sellers to developers, an effort to increase use of its payment programs on other Internet sites and stores. EBay’s new platform lets any developer create products and connect with retailers, without requiring them to use EBay, Donahoe said today at EBay’s Innovate developer conference in San Francisco.
“We’re building up small, mid-tier and large merchants to accelerate growth,” Mengerink said in an interview. “If we have millions of merchants on this globally, we can distribute the best integration of your merchandise and connect into the EBay storefront. The exact same thing is true with PayPal.”
Developers for both the company’s GSI and Magento platforms will work on creating social commerce functions, such as clickable tabs for e-commerce that mirror Facebook’s “like” button, and decide where in the purchasing process they belong, Mengerink said.
Offline Products
While EBay’s inroads into Facebook’s commerce efforts may help attract more merchants and developers, the announcement may have disappointed investors who were looking for a “higher- profile” connection with Facebook, said Doug Anmuth, an analyst at JPMorgan Chase Co. in New York. That relationship probably won’t happen in the near term, he said in a note today.
PayPal is also rolling out products that move the service offline into local retailers, said Sara Gorman, a PayPal spokeswoman. Those products will let consumers pay through a mobile phone application, by swiping a card or by entering a name and PIN number at the point of sale in a store. The company will test the products with a “major” retailer by the end of this year and introduce them more extensively in 2012, she said.
Growth Through Acquisitions
Donahoe said in an interview with Bloomberg Television that the company also intends to grow through takeovers. EBay’s announcements today integrate two acquisitions — Magento, acquired in June, and last year’s purchase of RedLaser, an application that lets mobile users scan bar codes.
“We will selectively make acquisitions where it can help enhance our position,” he said at the conference. “That is, really building out the kind of commerce tools that we want for the future.”
There’s no chance the company would spin off PayPal, the company’s payment service, Donahoe said.
EBay shares fell 8 cents, or 0.2 percent, to $32.75 in New York today. The stock has gained 18 percent this year.
Facebook Chief Executive Officer Mark Zuckerberg unveiled new ways for members to use the social network to share music, movies, TV shows, news and activities such as cooking and exercising at its F8 developers conference in San Francisco last month. The features will include partners such as Spotify Inc., Hulu LLC and Rdio Inc., and will let users see a history of songs played and listen together, he said.
Social Commerce
EBay, based in San Jose, California, is betting a relationship with Facebook, which has more than 800 million users, will jump-start developer adoption of X.commerce. EBay’s partnership will be the next step in making commerce more social on Facebook, Mengerink said.
“We’re not saying ‘merchants, work with EBay developers,’” he said. “We’re saying, ‘let us connect you.’”
EBay announced an application store for the Magento platform today called Magento Connect, letting programmers create and sell software.
The company also will update its RedLaser application. The newest version will let consumers pay for products they scan with their phones, allowing EBay to take part in more of the consumer’s thought process before and during a sale.
–With assistance from Cris Valerio in San Francisco. Editors: Jillian Ward, Tom Giles
To contact the reporter on this story: Danielle Kucera in San Francisco at dkucera6@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
