Stewart:
I think it will be a long time before gross margins decline significantly at eBay.
The only thing I can think of that would cause a large decline would be for eBay to lowers its fees, but other than for featured auctions, eBay's fees are considered quite reasonable by just about everyone I know selling on the site (including myself).
Just this past week, two people (on different occasions) called me to ask how they go about selling items on eBay. One was going ti have a yard sale, but had heard about eBay and thought they might be able to get better pricing that way. The other knew someone who was going to throw away a Blues Brothers original manuscript, among other collectible items, and suggested they might be able to get some money for them off ebay.
Sure, ebay can't grow 50 or 70 percent every 3 months, but even with this slowdown you mention they are still running 40 percent ahead of 13 weeks ago.
I still maintain that Yahoo auctions are a joke. You say they have promoted it very little. (But with Yahoo's 200M + page views per day, and with the auctions tab on their main page, you would think that would be awesome promotion.) I don't personally know any serious seller who takes them seriously. An auction site needs serious, volume sellers, and eBay is the one for serious sellers. Sure, if another auction site could deliver the value proposition delivered by eBay, the sellers would go there.
Amazon has made some progress with serious sellers, and Amazon has the best chance of making significant progress against eBay. I certainly don't think Amazon's possible success in online auctions will detract from eBay. In fact, it could help eBay, especially for the new buyers and sellers Amazon brings in, when they find out there are 30 to 40 times as many items for sale on eBay as there are on Amazon.
eBay's strength is in its volume of traffic of buyers and sellers. That advantage would be extremely hard for ANY company to overcome.
My personal opinion is that no one will overcome it, definitely not over the next year, and highly unlikely even during the next 5 years.
I'm not going to argue with you about stock price. I wish more than anyone that eBay's market cap was 1/10th what it is now. (If it was, I would sell my houses, my cars, my pottery, and everything else and put it all into eBay -- but that is wishful thinking.)
My biggest fear is that AOL or Microsoft or possibly Amazon or Yahoo will buy eBay. It would certainly be a very smart move for Microsoft, who could easily afford them. |
