2011 – What a year it has been!
21st December 2 Comments
Every year, the last days before xmas are always a good opportunity to take a look at what has happened in the past 12 months and what we are likely to see next year. In other words, there are reviews all over the place and because we like a little bit of tradition once in a while, we do our own review here. So sit back, relax and enjoy our little trip back into the more recent commerce past.
This year’s first month was dominated by news related to Amazon: Firstly, the very last piece of proof that was needed to convince even the most avid books-on-wood-pulp-readers that ebooks are not just a toy for geeks was provided by the very company that revolutionised trade with paperbacks and the likes: In January 2011, Amazon announced that for the first time ever, the Kindle ebook sales have overtaken paperback books and are now the retailer’s most popular format. Secondly, Amazon acquired the remaining parts of European movie-streaming and DVD rental service Lovefilm for about $328 million. This exit was awarded the most notable one in 2011 according to the Europas.
And, to top this off, CEO Jess Bezos proudly presented the fact that for the first time ever, his business made more than 10 billion in turnover in one quarter.
February was not a terribly interesting month – at least if you focus on the commerce scene and keep aside mind-blowing events such as the German carnival that regularly renders parts of this country absolutely unusable. As could be expected, Facebook overtook German StudiVZ in Germany as far as its market share is concerned. StudiVZ, a local clone of Facebook and for this reason also in some legal battle with the former – was set to dominate the social network scene in Germany a couple of years ago, which is the reason why Holtzbrinck, a German publisher, decided to acquire it in 2007 for €85 million. The StudiVZ group has had a rather inglorious past of data loss and shady business practices and failed to embrace the chance of an open API that contributes to Facebook’s success to this day.
We at ecomPunk HQ are Apple fanboys and we wear this name like a badge of honour. Understandably, all of us were excited when – surprisingly – Steve Jobs hit the stage and presented the successor to the device that revolutionised the tablet market since it was announced last year: the Ipad 2. It provided necessary – however not revolutionary – updates and established Apple in the tablet space even more.
A rather disreputable history of online activity was pushed into focus when the Media-Saturn Group – the largest retailer of consumer electronics in Europe – announced to venture into the ecommerce market yet again by buying online electronics retailer Redcoon. Before that, Media-Saturn had offered some half-arsed online shop solutions themselves, but were never able to come up with an online sales strategy that took advantage of the web’s growth rates without cannibalising sales in local stores.
Amazon again: The retailer launches the German Kindle store and from the start has some 650,000 ebooks on offer, with 25,000 titles in German. Also, important German newspapers such as Die Zeit und Handelsblatt are also available on this platform.
Also, Amazon shook the payment provider market by introducing a product called Amazon Payments. The idea behind it is really simple: What if one could shop in an online store and by just typing in one’s Amazon credentials, one could access all the addresses and payment methods used there? Amazon claims to have a customer base of 130 million who could actually use the service. Interestingly, Amazon uses exactly the same pricing model as PayPal does.
Yes, they’ve done it again. Microsoft, who are notoriously running after all the trends the internet has brought us in the past few years rather than setting some of their own, have used a lot of cash to buy Skype. The widespread VOIP technology which was orignally invented in Sweden and has then been sold to eBay has been introduced to the Microsoft family after a sizeable transaction fee of $ 8.5 billion. Sources say that Google was interested as well, was however prepared to invest “only” $4 billion. As a Mac user who is only using Microsoft products when I cannot avoid it, I don’t know which MS product Skype has already found its way into. Skype seems to be unharmed by the deal – yet – and I hope we will not see another repetition of the Yahoo!’s syndrome: Buy innovative and interesting technology companies – see Flickr and Delicious – and let them bleed out and wither because of sheer lack of strategy and vision.
This month marks two important milestones on eBays technology shopping spree. First of all, eBay acquired GSI Commerce (Toys’R’Us, Mattel) for $2.4 billion. Secondly, eBay invested in Open Source technology: After eBay had bought 50% of Magento in 2010, in June of this year it was announced that eBay would acquire the second part for more than $180 million. Since 2008, Magento has shaken the international ecommerce scene by delivering an Opensource shop software that provided functionalities which at the time were reserved for very costly commercial packages such as Intershop, ATG & Co. Combined with a great marketing campaign, Magento quickly won the hearts both of many web developers but also of many shop managers worldwide.
But not everybody is smiling, as Techcrunch reports. Allegedly, former employees of Varien, the original company behind Magento, have been ‘cheated’ out of their contracts so that they could not benefit from the shares they had in the original company. Now that some time has passed, no further news from this argument have become public – which either means that the suing parties have received enough payment to stop all discussion or that the discussion is legally forbidden.
For eBay, this purchase fitted their hunting scheme: Over the last few months, the company had invested heavily in gaining additional knowledge, buying companies such as GSI Commerce and Red Laser. One of the outcomes of this is X.commerce, a technology that allows to interconnect different participants in the ecommerce space, such as shop and payment providers etc. (See an interview with the VP of X.commerce Matthew Mengerink in this blog). Also, Matthew Mengerink was interviewed by Robert Scoble about this product at this year’s Le Web conference
At the end of this month, Google surprisingly launched its own social network called Google+ in order to catch up on the strongly growing Facebook and to make up for its own conceptional mishaps such as Google Buzz or Google Wave. What had begun as an invite-only service was rolled out to the general public in September.
In July, music streaming service Spotify that originated in Sweden and has a user base of 10 million in 7 European countries, launched its services in the US. Even if us Germans haven’t yet had the possibility to enjoy Spotify’s services here – bloody country restriction, damn you label-lawyers! – the fact that a service/technology goes from Europe to the US and not vice versa is oddly satisfying.
Next up in July is another acquisition: After having taken over buy.com in the US and Priceminister in France, Japanese Internet service company Rakuten purchases a stake of 80% of Germany based marketplace provider Tradoria.
And: Do you still remember MySpace? The pre-Facebook social network that has been the favourite place for musicians and fans to distribute and enjoy music? And that has been bought by Rupert Murdoch’s News Corporation in 2005 for $580 million? Well, after having been the most visited social network site between 2005 and 2008, user numbers have declined despite several redesigns. The end of the story: MySpace is sold to digital media company Specific Media and Justin Timberlake for a modest $35 million.
Prior to the Groupon IPO some dark clouds were gathering on the shiny stock heaven. Analysts took a deep look into all the figures they could get from Groupon and found out that the business model was not quite as sustainable because they had a massive negative operating profit. I’ve written more about the hard times Groupon had in this phase in Oh Groupon, where art thou headed?
Also in August, payment provider Paypal hit the news with the not-so-clever and especially not-so-well-communicated move to freeze those merchant accounts that were connected with trade with products from Kuba. In 1952 the US had issued a trade embargo that forbids the trade with this country that has not been lifted yet. Why more than 60 years later Paypal – an American company – deems it necessary to take this drastic action against some online merchants will hopefully be explained by future generations.
September was another one for the biggies. First up, Google tried to beef up its own Google Offers couponing service by buying German Groupon clone DailyDeal. Secondly, Amazon presented its Kindle Fire tablet. Amazon’s Jeff Bezos surely is not hogging the spotlight like Apple’s Steve Jobs and the Kindle Fire device is rather dull compared to the iPad for instance. It has a 7inch LCD display (no eInk like the traditional Kindles), runs a custom-made Android version and can display all kinds of content – nothing exciting here. But: It’s connected to Amazon’s Kindle store and all kinds of other Amazon cloud services and it costs only $199! In other words, one buys a device that only costs a third of an iPad and can instantly access Amazon’s entire digital catalog. Spotlight hogging or not, this was a good day for ebooks and for Amazon – yet again.
The iPhone 4S was presented – which disappointed a lot of people who expected it to be number 5. The new version has a dual-core processor, an enhanced camera and the Siri voice recognition on board. The number of sold iPhones again were higher than that of its predecessor. This time, Apple’s new CEO Tim Cook gave the presentation of the most important facts during Apple’s special event on October 4th.
On the very next day, the founder of Apple Steve Jobs passed away. What more to say? He sure was a person that influenced the usage of computers in all our lives – from the PC over the MP3 player to the mobile phone. A lot of people criticise that Jobs did not invent new things. But he sure was a visionary that had the capability to take innovations and put them together into unique products. This is a true fanboy speaking here and, by the way, I can really recommend his biography in this context!
Steve Jobs’ death was also referred to by the keynote speaker of the K5 conference that took place on October 5th/6th in Munich. This conference’s aim was to bring together the most important online retailers in Europe and have them discuss the past and future of their respective businesses. We have covered this event, writing about it (Day 1, Day 2) and have also pulled a lot of people in front of our camera (and our dead-cat microphone) – see our ecomPunk Youtube channel for that. Next year will see another K5 conference, please put September 20/21 in your calendars now!
This year ends with the largest web conference in Europe, ie. LeWeb which took place December 7th-9th in Paris. For most parts, American companies pitched their services which I found a bit strange. Aren’t there enough cool kids here in Europe that could hit the stage and talk about how they’re innovating? At least, designer Karl Lagerfeld made a notable appearance announcing his new fashion line Karl which will exclusively be sold via Net-a-porter.
This month also saw the foundation of the ecomPunk GmbH with four punks getting together in holy business-matrimony, ready to rock the world of commerce journalism. Although this blog exists for a couple of months now, it’s from now an that we officially do business together. And we mean business as well, our aim is nothing short of becoming the most widely-read blog about European commerce in the future. In order to get there, we have a lot of stuff in the works, where more regular series (such as the infamous Freaky Friday by our very own Kai) and extensive event coverage are just the tip of the ecomPunk iceberg. To get this started, we are currently setting up an attractive sponsorship programme – if you are interested, just drop us a line.
2011 was dominated by major players claiming important strategic positions in the commerce, mobile and social space by either coming up with services of their own (Amazon, Facebook) or acquiring companies to achieve their goals (eBay). Mostly, those players operate from a small patch of land in the state of California and yet dominate tech news worldwide. For 2012, we expect that more companies from Europe rise up to the challenge, companies such as Spotify are a promising start. Let’s all roll up our sleeves and get going – 3 – 2 – 1 …
(Image by bayasaa)