One of the strongest factors credited for Ebay’s return to form is continued strong growth in mobile commerce.  Fred Wilson talked a bit about this in his most recent post and there was a nice article in the NYT about it as well.

Beneath this lies something very instructive for large technology companies.

When many people hear about the growth of commerce on Ebay, most people say… “really??”

First, mobile commerce is often thought of as driving in-store purchases.  After all, that’s the benefit of mobility – you can react to coupons or offers that are presented in the right context.  But as I’ve said before, the power of mobile has very little to do with mobility.

The bigger issue is around the buying experience.  The web experience of Ebay is pretty cumbersome. The thought of trying to make it work on mobile sounds pretty daunting. After all, Ebay is great because you can find pretty much anything there.  Breadth should be harder to handle in a small form factor.

Or is it?

Part of what has held Ebay’s product back historically is also what makes it great.  It’s an amazing horizontal platform.  You can really sell or buy anything on the site – from auto parts, to art, to shoes, to industrial equipment.

But what that also meant was that the site experience was not really ever optimized for anything in particular.  For the most part, the shoe buying experience was more or less equivalent to the golf club buying experience.

This also translated to product decisions.  Any given product upgrade that benefited the horizontal marketplace had a big big impact.  Anything that was more tailor made for a particular category was harder to justify.  The benefit would be limited to a smaller addressable GMV and there was perceived cost in managing disparate product experiences.  This means that the Ebay product fell behind over time.  Amazon could in many ways offer a stronger horizontal product because they had great control over the customer experience. And more vertically focused players could gain share as individual categories become more and more significant online.

Enter mobile.

The beauty of mobile is twofold.  First, it allowed Ebay to start over with their product.  The contraints of the mobile interface meant they had to be more deterministic in their thinking about what was and was not important for a shopper on Ebay.  It’s a better experience (although it could still be a lot better).  Plus, it also makes for a much more seamless listing experience too.

But second, it has allowed Ebay to experiment with more verticalization of their product.

Check out Ebay’s Fashion app. Unlike the Ebay app or the core site, the emphasis of this app is MUCH MUCH MUCH more on merchandising, discovery, and social. We were always struggled to deal with categories that were more about serendipity than about search, and allowing the mobile app to live on its own has helped this category come to life.  It’s clear from Donahoe’s many examples that a disproportionate share of their mobile commerce growth comes from this app vs the core app.

Whether intentionally or not, Ebay benefitted by the ability to create a silo around mobile, start from scratch, and not worry too much about their legacy product decisions when building a fashion oriented experience.  It almost forced them to create a separate brand and site – something that was discussed multiple times even in the pre-mobile world but was impossible to really pull off.  It’s a neat example of a company that has found a little path out of the innovators dilemma.

Note: I left Ebay in 2005 so these are just my own observations