New eBay platform tries to lure developers away from Apple

SAN FRANCISCO: Online auction site Ebay is building a new division to woo developers and attract more merchants as the company tries to emulate the success of Apple 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.

[caption id="attachment_86103" align="alignleft" width="380" caption="Reuters"][/caption]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. 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.

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Omniture, a unit of Adobe Systems, 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 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."

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."

Reuters