I was watching a TV Special on CNBC last night entitled "The Business of Innovation" and sub-titled "From Boardroom Theory to Business Reality" and I kept waiting for the segment where John Donahoe of eBay came onto the stage and discussed the "Disruptive Innovation" happening at eBay.

Of course that segment of the show has yet to be written and the outcome is far from certain. Will the "Disruptive Innovation" happening at eBay be an example of how to re-invigorate a stagnant business model or how to kill a "good thing".

eBay's (EBAY) "level playing field" has a bump and it's called Buy.com

If you ever wanted a preview of the "new eBay," I've got a treat for you: it will look a lot like Buy.com's eBay store. You will be surprised to see 150,000 3-day Fixed Price listings. Yes, that is correct—150,000 FP listings, in categories like Books, Music, DVD, and Computers.

In this high stakes game of "Texas Hold-em" Microsoft (MSFT) still has the upper hand and I believe they should take advantage of that position.

I wrote about this in February and Microsoft finally agreed with me, when Steve Ballmer "laid down the gauntlet" and gave Yahoo (YHOO) three weeks to seriously begin negotiations on their proposed buy-out offer. Yahoo of course said no and began testing a relationship with Google, to outsource their paid search and once again rumors surfaced about a potential Yahoo/AOL deal.

I've looked at eBay (EBAY) ProStores over the years, all 9 versions of it and it just seems eBay doesn't get it. ProStores should be the natural migration path for eBay Sellers; in fact Pro Stores should replace the eBay Stores/Shops platform completely.

In a Perfect World:

While eBay (EBAY) continues to battle the negative "buying experience" of high S&H charges on their platform, Amazon (AMZN) has that problem covered -- it's called Amazon Prime.

In addition to their very successful Super-Saver program, Amazon has seen tremendous growth in Amazon Prime memberships. The company is tight-lipped about its Prime membership numbers, but they wouldn't be expanding internationally if the program were not successful. During the second half of 2007, Amazon rolled out Prime to 3 international marketplaces (Japan, UK and Germany)

I'm a divorced dad, so I have some personal experience with what happens to a marriage that is failing. In my case, I tried to make the marriage work until we had a “Come to Jesus” moment when she said she didn't want to. I wasn't going to stay in a marriage that didn't work. Many of my friends, going through the same thing, have not left for various reasons (kids, financial, fear, etc.)

Why do I bring up divorce in a financial blog? Because, marital problems are exactly like what is happening between eBay (EBAY) management and eBay's sellers. They are in the middle of a bad marriage and looking at their options.

I am not an M&A expert, so I can't make the case for a merger between eBay (EBAY)and Yahoo (YHOO), that will be a better deal for Yahoo shareholders than the offer from Microsoft (MSFT), but, in my opinion, a merger between eBay and Yahoo would be much better for Yahoo and, in the long run, much better for eBay.

When you've been an observer of eBay (EBAY) for many years, you often have moments where you take a step back and say; What happend to eBay's _____ ? With eBay the list can get pretty long.

What happened to eBay's ______ ?

The impending death of eBay (EBAY) as the king of all marketplaces has been rumored for years. Every time management makes a change, raises fees or adds sponsored links, sellers say they will walk.

I've been following eBay since 1999 and I've seen and heard it all. Still eBay continues to be the 800 lb. gorilla of e-commerce. So it didn't surprise me when eBay sellers were once again on the warpath. Granted, this time the unrest seems less about fees and more about the changes to feedback; the perception is that eBay is taking away the ability for sellers to protect their business. In fact, during a conference call Tuesday between PeSA members and eBay management, I did not hear one question concerning fees; instead I heard about DSRs and Feedback.

Word is spreading fast and registrations are pouring in for the 2008 New Orleans eCommerce Summit in April. With almost 3 months to go we have easily surpassed the 100 attendee mark which is helping us attract even MORE sponsors than previous events!

In fact, for the first time ever, Microsoft (MSFT) is sponsoring the eCommerce Summit and is working with us to make a grand introduction that includes a very generous Special Offer for attendees.

With fears of recession in the wind and announcements of job cuts coming down the pike, I would look for growth in small business in 2008. As the corporate world becomes less secure, many will strike out on their own in the hopes of controlling their own destiny. Starting off small while still employed and learning the ropes, makes sense in this environment. There are currently over 19 million sole proprietors and small businesses in the United States and millions more worldwide. This number will increase in a recession and soon, very soon, the marketplaces will be competing for their business. eBay (EBAY) has already signalled that it will, by announcing fee reductions. Play.com charges lower fees than Amazon.com (AMZN), Etsy.com charges lower fess than eBay. Those marketplaces that can achieve critical mass in traffic will be reaching out to 3P sellers more aggressively in the years ahead. Power to the 3People! (Sorry, that sounded better in my head)

Amazon is aggressively courting SMB's (Small and Medium Sized Business) to sell on its platform, expecting to add nearly 40K high value accounts in 2008 and expanding globally. eBay, after years of trying to manipulate seller behavior with their 3 levers (I call them hammers) Price, Policy, and Product, has changed its tune to offering carrots instead. Sellers, on the eBay platform, whether they realize it or not, are getting back some of the power they gave up over the years. Organizations like PeSA and ECMTA should increase their membership in 2008 as sellers/merchants try to unite behind a common goal; selling their product.

Since eBay (EBAY) still hasn't made their "Big" announcement, I'm just sitting around the office thinking up stuff.

I've been asked by several readers why I'm writing more positive posts about Amazon (AMZN) than I do about eBay (EBAY), so I thought I would list the reasons. I still believe eBay can be a fantastic business again but I don't see that turnaround anytime in the near future.

Why I Prefer Amazon over eBay

The big "R", many people can't even force themselves to say the word completely --
R E C E S S I O N. The very mention strikes fear in the markets and in households.

Recently, Jim Friedland, Senior Research Analyst for Cowen & Company, LLC, came out with a research note on the likelihood that eBay (EBAY) and Amazon (AMZN) would be hit hard in a recession. I don't have the research note to reference but this is what Wired.com said:

Okay, so I couldn't just stop posting for the rest of the year because I came across an interesting idea regarding eBay's (EBAY) Meg Whitman in 2008. The credit for the idea comes from the Yahoo message boards, which are usually full of loony comments. I'm not sure this is a real possibility but in theory it is feasible, so here goes.

• eBay managers often use "Leave of Absence" to recharge themselves or find new employment. It is actually ideal because they can always return to eBay.
• Meg has been exercising options regularly all year and certainly could afford to defer her compensation for an extended period of time.
• John Donahoe has been hitting the PR trail heavy over the last month and looks to be in line to take over while Meg is away, either as interim CEO or officially as the new boss. If he's successful, with the changes he's making, Meg can leave knowing that the company is in good hands. If he fails then she can come back (assuming Romney loses) and save the company.
• She is very involved in Mitt Romney's campaign and I would say if he wins, she will be offered a cabinet position (Commerce Secretary) and who would turn that down. By not leaving eBay officially she hedges her bets. If Romney does not get the nomination then she can come back to eBay. By taking a Leave of Absence she can work on his campaign indefinitely.

I'm sure you can come up with other reasons this idea makes sense, I've just listed a few. If I was a betting man I would say that Meg will announce here Leave of Absence in January and hit the campaign trail for her good buddy Mitt.

I know it seems early to be making predictions for next year, but I've seen them pop up here and there on other blogs, and I don't want to be the last one to hop on the train. One caveat, these predictions are for entertainment purposes only. Don't make any business/personal decisions based on what you read.

1. eBay (EBAY) and Yahoo (YHOO) Merge. At some point next year I see these two companies coming together as their respective share prices flounder. I just can't see investors putting up with another year like the last two. Yahoo is a on a short leash and eBay will be, especially as the company moves towards changing its marketplace fee structure.

In 2007 eBay (EBAY) management said they were going to concentrate on the buyer experience and called 2007 the "Year of the Buyer"; well I can't actually find any quote where they said that but 2007 was considered the "Year of the Buyer". Here is Bill Cobb's State of eBay announcement from January of 07'

2007 - Year of the Buyer:

3P stands for third party sellers. They used to be called "eBay sellers" but oh, how times have changed. 3P sellers are being credited for the resurgence in Amazon's (AMZN) share price as well as the company's revenues and, more importantly, profit. More and more 3P sellers are looking for the exits in regards to eBay (EBAY).

The marketplace dynamics are changing. eBay underestimated their hold on sellers and Amazon was there to woo them. Now a strange phenomenon is taking place. The type of product many 3P sellers are selling on eBay is trending toward end of life, liquidation, etc. Many 3P sellers are now using eBay for capital recovery while the lion share of their product is being purchased on Amazon at a higher margin. The IT has moved and continues to move to Amazon from eBay.

eBay's (EBAY) recent purchase of German Auction Service Provider AfterBuy got me thinking about eBay's end game in the auction tools business. I had always thought that it made sense for them to own that part of the business but with so many different service providers, how would they go about acquiring the right ones? Well, in the aftermath of ChannelAdvisor's acquisition of MarketWorks, this AfterBuy purchase is starting to make sense. So here are 10 reasons I think eBay will eventually acquire ChannelAdvisor:

1. eBay wants to own the entire transaction, which means they want the roughly 2% that these large service providers like CA get for their services. With the possibility of rolling back fees or at least capping them for now in their main marketplace business, eBay is looking for growth elsewhere.