New Face Of E-Commerce

For Amazon and eBay to grow, these hubs of E-commerce need to open their Web sites to a community of developers who will give their customers the tools they demand.

Information Week, July 26, 2004
By Aaron Ricadela and John Foley

EBay needs to open up to outside developers, Oddcast's CTO Gil Sideman says. Photo by Andrew Hetherington/Redux	Oddcast Inc. is typical of the kind of company that's helping to make eBay a hub of development. The 5-year-old software company develops interactive characters that act as Web-site guides for clients such as Coca-Cola, Intel, and McDonald's. Last month, it started selling an online capability called ""Publish to eBay," so someone can license Oddcast's VHost SitePal software and design an online character that's published directly to that person's eBay auction site. "Never in a million years would this have been developed by eBay for its customers," Oddcast CTO Gil Sideman says.
Oddcast's software lets companies talk to would-be customers through their animated characters. Using a recording mechanism or text-to-speech software, an eBay retailer can have an avatar pitch customers about what promotions are available. Oddcast hosts the software that runs the animation on its servers. So far, a few dozen companies have signed up for the service. EBay needs to open its environment to outside developers because the company can't spot all the market niches eBay customers might want. "The willingness to be open and expose the innards of their system to an outsider--for eBay, it's a smart move," Sideman says. Here's a measure of how important this open approach has become to eBay: About 40% of the items listed for sale on eBay's U.S. site come in through its API. That means two of five products are loaded onto the site software-to-software, rather than manually posted using a browser-based form. Major retailers are taking advantage of these tools, and software companies are hustling to make their tools fit the model. Does all this have any effect on sales? And is there real money to be made here? Oddcast's eBay feature costs $3 a month, on top of a $10 monthly charge to use SitePal, which has 1,500 customers. "We're still struggling with analyzing the potential models," Sideman says. Amazon and eBay know there's hard work to do to get the model and business rules right. But they show no sign of easing up on plans to become as much a destination for developers as they are a destination for shoppers.