Intuitively, my struggles with ebay have always centered on my belief that their true value lies in their brand, and nothing more. As more and more businesses start to come online and offer creative type auction services to the market, and as ebay tries to protect their business platform as intellectual property, I see ebay's ability to keep a lock on their market dominance as an eroding process over the long term.
That's exactly right. Brand is, in the Godzilla Game, one of the seven most important elements and carries a higher weighting in the Icarus Scoring system than other elements. As of yet, the other players in the online auction space have not had an effect on the eBay customer base. I've checked out the other online auction sites and eBay dwarfs them all with the amount of customers and auction items available. This fits squarely under the stickiness element that is scored with a heavy weighting in this business model under the Icarus Scoring system. You are right, these need to be watched closely. I liked last night's earnings report in terms of customer base growth and number of items for sale. Many are complaining that the ASP of the items reduced. However, with a growing number of items, one can't expect them all to be big ticket items - rummage/junk sales aren't about big ticket items.
Regardless of erosion, the business model of online auctions is the most gorilla like in the Godzilla Game models. The 'option effect' plays a huge importance as well. Witness the addition of autos on eBay as well as the overseas expansion. Other additions will surely follow and when we do factor in brand loyalty/stickiness - we begin to see the winner take all elements of this Godzilla Game. I will be intereseted to see Amazon's online auction numbers tonight after the bell.
Until I can manage to get past these fundamental concerns, I cannot justify investing in the stock, regardless of whether they fit the Godzilla profile.
That's a very fair and wise strategy. As I mentioned, I only last week decided to test the waters with a mere 40 shares in my Godzilla Game account. I also own a ton of DoubleClick, a little Yahoo!, a little Amazon and some AOL in this account. I am playing the game with real money. ICGE, ARBA reside in this account as well.
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