Web 2.0 Summit: EBay's Max Mancini Turns Threats Into Opportunities

Max Mancini has one of the coolest job titles in the industry. As senior director of platform and disruptive innovation, Mancini's job is to figure out what technologies and business models might threaten eBay's business and do it first, for eBay, thus transforming the threat into opportunity.

It's a tough job. An essential part of eBay's success is its tools for connecting buyers and sellers. More than that, eBay is built on a framework that allows its users to determine whether other people are trustworthy. Those trust tools are being challenged by Web 2.0 sites like Facebook, MySpace, and LinkedIn, which have their own tools for determining whether people can be trusted.

Mancini's job is to turn the threats posed by Web 2.0 into opportunities for eBay. I interviewed Mancini at the Web 2.0 Summit in San Francisco today.

"My team looks at the Internet and we see what can disrupt eBay as a business," Mancini said."We figure out how we can disrupt ourselves before we're disrupted by others."

Mancini and his team work in a tough financial climate for eBay. It recently took a $900 million write-down for its 2005 purchase of Skype; even Skype founder Niklas Zennstrom admits the company was overpriced at $2.6 billion. On the other hand, the company's core auctions business is strong, and PayPal is improving. EBay plans to announce third-quarter results today after market close.

The interactive application tools inherent in Web 2.0 are a big source of disruption, Mancini said. Previously, Web applications were a step-by-step process, with users moving from page to page and filling out HTML forms. Now, with technologies like Flash, users are accustomed to interacting with Web applications in a very rich way -- as they did with desktop applications since the 80s and 90s.

As part of moving eBay to rich applications, the company released software called eBay Desktop, a client application for shopping on eBay, built on Adobe's AIR technology. EBay Desktop allows users to do things like save searches for eBay items, and navigate tables of search results to drill down for more information, in ways that are easier to do than on the Web, Mancini said.

I asked Mancini whether technology like eBay Desktop was really a step backwards, to the pre-Web days when companies like banks released dedicated client applications for e-commerce that users had to download and install. Users decided that they didn't want to download individual applications for individual merchants; they wanted to just do all their e-commerce in one application, the Web browser.

But Mancini said that eBay Desktop is not a step backwards because it integrates the best of Web applications and desktop applications. For instance, the desktop application provides greater security than the Web. And the early, pre-Web e-commerce applications batch-processed transactions, where the new desktops apps are interactive, said eBay spokesman Usher Lieberman (who joined us for the interview.)

I wasn't entirely satisfied with that response, but I didn't push the point. If anybody can explain why a desktop application like eBay Desktop is superior to the browser experience -- so much so that people will be willing to go to the trouble of installing it -- leave a message in the comments area below.

EBay is also looking to leverage social networks like Facebook, LinkedIn, and MySpace, for the trust relationships they've already built with users. For example, eBay has a Facebook application that lets users share their likes and dislikes with each other. And users can allow their friends to add items to the users' own watchlists.

On its own site, eBay has built the EKG, a combination Digg-like and photosharing tool. Mancini said that's available off of innovation.ebay.com, but I didn't see it. The EKG allows users to spotlight individual product photos and rate them, then find the most popular-rated items. "EBay isn't just an e-commerce site, it's about stories and interaction," Mancini said.

I clicked on that instantly; I love seeing stories on people's blogs and Digg about weird items put up for sale on eBay. Mancini used the example of a wedding dress, put up for sale by an erstwhile bridegroom, who described an involved story why his the dress wasn't used by a woman marrying him. He posed for the product photo himself: a hairy, bearded man wearing a wedding dress.

I asked Mancini whether eBay was looking into Second Life in particular and virtual worlds in general, since those are highly social environments where shopping is a favorite pastime. Mancini said eBay has built a Second Life area but has not yet decided whether to release it publicly.

I also posed my favorite question of the Web 2.0 Summit to Mancini: how will social networks transform the Internet in the long term?. He said socnets will accelerate the Internet's abilities to connect communities of interest. With social networking sites like Facebook and MySpace, you can not only find people with common interests to yours, you can find out what they're interested in.

The challenge for businesses is figuring out ways to sell in those communities. "People who are heavy participants in social networks don't want to be marketed to," Mancini said. EBay has an advantage there -- it's a social network built on commerce; people go to eBay expecting to buy and sell.

The other part of Mancini's job -- covered by the "platforms" part of his title -- is to work with third-party developers to integrate with eBay. The company works with 60,000 developers, who've built 90,000 applications that generate over 25% of eBay listings. Mostly, these are applications that integrate into big sellers' internal systems for managing sourcing, inventory management, and making decisions on how eBay items should be priced.

Mancini's team works with applications that benefit buyers as well. For example, Mpire.com develops services to allow consumers to shop, compare and find the best deals online. EBay is working with MPire.com to integrate MPire's tools into blogs, and connect those tools into eBay.

"I use the example of a fashion blog," Mancini said. "You might be on someone's blog, and they've written about the latest Coach purses. It would be nice if you can link from that blog to find the best place you can buy a Coach purse." Ultimately, you'd want to be able to do that without leaving the blog.

I asked Mancini about eBay's deal involving its Skype subsidiary and MySpace; the two companies announced a deal where MySpace users could use Skype in their MySpace IM, using Skype to phone each other for free. But Mancini said that's a separate business unit, and he didn't know enough about the deal to comment on it.