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Technology Stocks : eBay - Superb Internet Business Model

EBAY 81.72

-1.0%

1:25 PM EST

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To: fedhead who wrote (6075)	11/4/1999 12:50:00 AM
From: Doug Fowler	Read Replies (1) of 7772

To initiate a position in eBay again: 1. eBay needs to fix its technical problems. While a backup is on the way, there have been 3 awful periods for eBay in the last 4 days, where the site has been effectively inaccessible. These are design flaws, and the backup would not have prevented these. The site needs to handle heavy traffic much more effectively than in now does, and that will probably require a complete architecture overhaul, which could take months or even years. 2. eBay needs to work to make the auctions more successful for sellers. Average auction prices have fallen dramatically over the past few quarters, and this means sellers are experiencing less success with their auctions. Too much supply, not enough demand. So, eBay needs to get very aggressive with bringing the buyers in. Yet, eBay derives two-thirds of its revenues through listing fees, so it doesn't have enough incentive to make sure the auctions are successful. Ultimately, this will come to slap eBay in the face if they don't bring in high volumes of quality buyers. 3. eBay stock is just too expensive right now, even by Internet measures.

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