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Technology Stocks : eBay - Superb Internet Business Model -- Ignore unavailable to you. Want to Upgrade?

To: Doug Fowler who wrote (3885)	6/27/1999 1:11:00 AM
From: James L. Fleckenstein	Read Replies (2) \| Respond to of 7772

Doug, your auction counts do not seem to take into account the false elevation starting about 2 months ago when the 10 day option was enacted. That would increase the carrying capacity of ebay significantly. To figure the exact amount, one would need to know the breakdown of number of auctions that used to go 3 vs 5 vs 7 days and then know from which pool the 10 day auction sucked numbers. As a user of 10 day auctions, I can tell you that I used to be a 7 day guy. The longer I can leave an ad the longer I can find the obscure buyer that I am looking for my star trek crap. If most items used to be listed as 7 dayers, then a sizeable fraction will go to the 10 day option. I think the "daily count" on the ebay site is more a reflection of the count of (auction x days) than the number of completed transactions (and hence revenues for ebay). By allowing longer auctions, ebay has accomplished a huge increase in the number of daily auctions (about 12% according to this example: Assume a total of 2M auctions at any given point and that 1.5M of auctions were listed for 7 days (10.5M auction-days) and the rest at 4 days. Now let's take 1/3 of the 7 day auction and put them up for 10 days. Now 1.0M are at 7 days (7.0M auction days) and .5M are up for 10 days (5.0M auction days). In this example, the number of auction days (reflected in the number shown on ebay and in your tallies), is 12 % elevated without any change in the number of auctions!) What a brilliant move of ebay to slide that little trick into the scheme just as new auction houses are poised to take market share away. How do your numbers look if you factor out a 10-15% augmentation due to this single trick? Although the option was added in about 2 months ago, it was not widely advertised, so that you should not expect an overnight effect.