We are entering the era of the Internet Super Company. eBay chief executive Meg Whitman’s words to the Financial Times certainly alluded to that path, without admitting to any near-term plans from her company.
It also may spell the end of the traditional merger.
The problem with giant mergers is the difficulty in branding. Think of AT&T, SBC, Bell South, and Cingular and the waffling between brand names.
Eventually it all becomes AT&T but not after $4 billion was spent and forgotten on Cingular’s branding alone.
Add that trouble and expense to a shaky tech market (the NASDAQ isn’t setting any fires right now) and an aggressive Federal Reserve, and Whitman’s assertion that eBay, or probably any other large Web presence, is steering clear of mergers, and the branding confusion that comes with them, seems a sensible course.
Brand recognition is more important than it ever was with the viral nature of the Internet. It’s safer to, as Whitman says, focus on maximizing and integrating the brands you already have.
In eBay’s case, that’s Skype and PayPal. Multibranding, not brand swallowing, is the key to dotcom success. Skype did not become e-Bay Phone and PayPal remained PayPal.
Whitman said eBay would keep an eye on smaller tech companies to acquire and integrate into their strategy.
One might assume also that because of the reluctance to merge, and the desire to keep recognizable brands in tact, we should expect to see more giants aligning against common market enemies.
The enormous agreement between Yahoo! and eBay is an omen of things to come – acquisitions and partnerships for multibranded, cross-promotional approaches to building defensive walls against potential blockbusters.
It’s Google and AOL. It’s News Corp. and MySpace. Soon it will be News Corp., MySpace, and Google (?).
