eBay's Biggest Strategic Blunder

So says CEO Meg Whitman was its failure to move into Japan as quickly as it should. Sounds like a first mover advantage issue yet again. Speaking at the University of Toronto's Business Design conference last Friday, Whitman explained that eBay's late entrance to Japan allowed Yahoo to get an insurmountable lead. "We were very late to Japan--by six months. It was the fourth or fifth market we got to outside the U.S."

Instead, eBay jumped first into Australia, Germany, and the U.K. in 1999 and then tackled Japan the following year along with Canada, France, and Austria. "In retrospect," Whitman told the audience at the Rotman School of Business, "I would have gotten to Japan as our second market after the U.S."

The result: eBay ceded the Japanese market to Yahoo in 2002. Whitman said 98% of Internet users in Japan use Yahoo, more than four times all the other portals combined. Yahoo does more than $5 billion of transactions annually in the country.

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