Competition can teach you a lot, especially if you make a habit of buying out your smarter rivals.
That's what happened when Crocs (NASDAQ:CROX) noticed a husband-and-wife team running a company, Jibbitz, that sold character clip-ons that fit into the holes of Crocs' resin shoes. Crocs acquired the company. Oracle (NASDAQ:ORCL) has done the same in the enterprise-software space. And when Photobucket became the photo-sharing option of choice on News Corp.'s (NYSE:NWS) MySpace, the social-networking site blocked the app before acquiring it outright.
Then you have eBay (NASDAQ:EBAY) turning this practice into an art form. When its own payment platform wasn't as popular as PayPal, it bought PayPal. When StubHub began catching on as an effective way to sell live event tickets, it bought StubHub.
Now we have eBay's announcement yesterday that it's opening up its Selling Manager platform to outside developers. Some 700,000 of eBay's biggest sellers use Selling Manager as a way to increase the effectiveness of the auction-listing and fulfillment processes. Giving developers a chance to build better mousetraps, by way of providing active sellers with improved tools, is ingenious, and I fully expect eBay to reward the more popular third-party applications with buyouts.
Sellers win with this partnership because it will create an improved selling experience. Developers win because they get their wares out there. And eBay wins because it makes its website stickier for power sellers.
After widget capability launched on Facebook last year, it wasn't long before large companies stepped in to acquire some of the more popular widgets, such as "Favorite Peeps" and "Extended Info." Expedia's (NASDAQ:EXPE) TripAdivsor.com bought the "Where I've Been" widget last summer. eBay won't be as passive. It's an acquirer. It takes its own "Buy It Now" motto to heart.
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