Stanford CIS

How Google and eBay Act Like Nations

By Colin Rule on

Michael S. Malone on the ABC News website: "So, what do I think these stories have in common? They beautifully capture just how the nature of companies has changed in the 21st century. Both eBay and Google are unlike any companies of 30 years ago, even global companies of that era such as General Motors and IBM.

For one thing, their reach is astounding — the two companies literally touch, over the course of a year (in Google's case, in a matter of days) more than a billion people around the world.

Moreover, these companies (and their peers, most notably the great social networking sites) actively enlist these multitudes of customers in the creation and management of the service itself. As such, they increasingly behave more like nations than companies, engaged in a social contract with their "citizens" and regularly dealing with matters that are akin to questions of sovereignty usually reserved for countries.

For example, what is eBay's PayPal but a kind of ersatz currency for the eBay nation? And when Google caved to China on censorship, it wasn't seen as just a business decision, but a violation of an unwritten Google Bill of Rights.

In this new corporate reality, business decisions can no longer be made simply for business reasons. Rather, the companies of this world must first understand who they really are, and then make decisions based as much upon cultural impact as the financial balance sheet..."

I definitely feel that eBay is like a country.  Maybe it's because my background is in public policy, but I feel the challenges we wrestle with on a daily basis feel a lot more like the challenges of a government than the challenges of a old-school corporation.  So the rationale for changes can't simply be bottom-line, as Malone notes.  You've got to worry about culture, community, and public opinion.

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