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Oct 22 2008

Does eBay’s new focus threaten Naspers?

Published by at 10:15 am under Opinion,Top Stories

eBay’s recent decision to refocus its business (less emphasis on consumer-to-consumer and more on business-to-consumer) and strengthen its position in the classifieds markets of Europe (west and east), has far-reaching consequences for Naspers’ investment in Europe.

The first reaction is to think this spells trouble, both for Ricardo (MIH’s brand in western Europe) and Allegro (the brand in eastern Europe). But, especially for Allegro and MIH’s activities in eastern Europe, because that’s where MIH is dominant and most effective.

But, think again. eBay’s declared aim is to strengthen its position in classifieds – not auction platforms. EBay’s refocussed business model actually softens the battle lines between MIH and eBay – positions them less “head-on”, so to speak.

Seen like that, it might be more or less irrelevant to Naspers what eBay buys in eastern Europe in coming months. Because it’s unlikely to affect its position as auction platform operator in this region.  

There’s a second reason why one should (perhaps) not get all too excited about an “upcoming battle to the end” between eBay and Naspers in eastern Europe. And this is something I haven’t seen mentioned anywhere: Since the middle of last year eBay and Naspers are partners in Thailand, where Naspers has been operating the very successful Sanook.com since 1998. It decided to take eBay on as a partner in May 2007 of a redeveloped portal (still in beta) called Shopping.sanook. (This looks like a blend of b-to-c and b-to-b).

Read about the partnership here (in German)

If these two are friends, and not foes, as we all think, there might never be a damaging battle in eastern Europe. 

But, a few nagging questions remain, such as: How much growth is left for Naspers in consumer-to-consumer in eastern Europe? eBay has hit the ceiling with consumer-to-consumer in Germany; eastern Europe also has a ceiling; when will that ceiling be reached? And where to then? (By then eBay will have closed all escape routes with a dominant position in business-to-consumer…)

Let’s assume eBay and Naspers are NOT behind-the-scenes gatgabbas, then there is only one way for Naspers to protect its investment in Ricardo/Allegro, and that’s to move into business-to-consumer in eastern Europe before eBay. In other words, to invest more now.

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