SAN FRANCISCO—Social networking may present an ocean of opportunity for Internet companies, but eBay is refusing the lure.
Web 2.0 Summit Co-host Tim OReilly tried several times to get eBay CEO Meg Whitman to commit to blending eBays PayPal online payment system with a social networking platform, but she wouldnt take the bait.
While OReilly said such an offering would give users greater control over their payment information and their identities on the Web, Whitman countered that it would also expose users to potential criminal activity online.
The conversation took place during the Web 2.0 Summit held at the Palace Hotel here Oct. 18, a day after the San Jose, Calif., online auction site reported a third-quarter loss of $936.6 million related to a write-down for its purchase of VOIP (voice over IP) specialist Skype.
Click here to read more about eBays purchase of Skype.
OReilly asked Whitman if there was a hidden social networking play in PayPal, pointing to Skypes plans to integrate with MySpace, announced Oct. 17.
Whitman said "potentially," noting that it remains to be seen whether or not PayPal will more fully encompass a persons identity, and not just his or her wallet for the Web. Whitman indicated the scenario is a question of whether or not it is safe to do something like that in a world where online identity theft is so prevalent.
"We have thought a lot about this," Whitman allowed. "The notion of combining the fact that PayPal knows who you are ... with eBays identity system is a very interesting model."
OReilly suggested part of that scenario would involve making the data portable for users, so they can access and manage it.
Whitman said eBay has to be careful because it is managing peoples money, adding that the company has to be careful not to give too much access to people around identity and reputation. For example, she said eBay cant have people managing their own reputation information because it would defeat the purpose.
Undeterred, OReilly said eBay and other online payment enablers are going to have to engage in some sort of social computing platform.
Whitman responded that while eBay is the hub of a lot of social information related to peoples purchasing patterns, it must consider privacy and access issues first.
OReilly cautioned Whitman that some enterprising hacker could "blow off the roof" and develop some sort of social networking/online payment system that will leave eBay with a missed opportunity. OReilly pointed to Napster, which he said changed the rules of the online music game.
OReilly also asked Whitman if there was any truth to the rumors that eBay and Yahoo are considering a merger. Whitman said the company has three great platforms in the eBay online auction, PayPal and Skype, noting that there is so much work to be done to get them to work together.
To that end, Whitman said that while eBay is disappointed with the $900 million write-down in the value of Skype, "the price of inaction is far greater than the cost of making a mistake. I feel like Skype has great potential."
One of the ways it hopes to maximize that potential is by pairing it with MySpace. In that arrangement, MySpace unveiled a new version of its instant messaging client that will let users access Skypes free Internet phone calls.
Read more here about MySpace and Skype uniting for free calls.
Whitman added that she wouldnt rule out a similar deal with MySpace rival Facebook.
Though it wont be mistaken for Facebook or MySpace anytime soon, eBay is not at sea in the social networking realm, as recent events suggest.
eBay Oct. 10 introduced eBay Neighborhoods, which meshes content from its listings, eBay Blogs, eBay Guides and eBay Reviews with message boards, member photos and social mapping tools the company gained in its $75 million purchase of StumbleUpon May 30.
Neighborhoods, like Facebook, MySpace, Orkut, LinkedIn and others, helps users map out their "social graph," or their connections between other users.
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