eBay/Skype split

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Sad to see the ill-fated marriage of eBay and Skype end in divorce. Though it’s more fun to celebrate strategy triumphs, disasters can offer important lessons too. An Economist article focuses on the sale itself and worries about eBay’s prospects, but doesn’t assess why the original strategy didn’t work. At its most basic, it was a common issue – over-optimism about how business A customers would form a strong and easily-captured potential customer-base for business B. [I made the same mistake ...

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Foreign market entry

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Another gem from SMS – unpublished as yet – by Fjeldstad, Gao and Burkay of BI Norwegian School of Mgmt. How come Google and eBay, dominant global players in their sectors, both got killed by local rivals in China – AliBaba and Baidu  [in eBay’s case, in spite of acquiring a strong Chinese firm]?

Seems from extensive analytical research and interviews with top management in both sectors, it was because they misunderstood the ‘value network’ model – thinking it was ...

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