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

To: mrknowitall who wrote (4188)	7/21/1999 11:41:00 PM
From: J. C. Dithers	Read Replies (2) \| Respond to of 7772

eBay incremental growth and the Diffusion of Innovation Theory... Probably you are familiar with this long-established explanation of how innovations become diffused over time throughout a society (a classic instance of a bell curve). Successful innovations of all kinds have been shown to move incrementally through "innovators" (2.5%), "early adopters" (13.5%) "early majority" (34%), "late majority" (34%), and "laggards" (16%). On-line households in the U.S. now stand at 37%, indicating the early majority phase insofar as internet usage is concerned. The U.S. is ahead of all other nations in this respect. Comparable figures for other nations include the U.K. at 11%, France at 4%, and Portugal at 1%. Figures are higher in Asia than in Europe, with Korea being second only to the U.S. These numbers point to the enormous potential yet to come for the internet, internationally (of the "you ain't seen nothin' yet" variety). The same theory no doubt applies at the sub-level of internet auctions. Likely at this level we are in the early adopter phase in this country, and at best the innovator phase elsewhere in the world. In the classic bell curve, growth in the early phases is slow, and the real acceleration of adoption of an innovation occurs as the early adopter phase transitions into the early majority phase. This is where word-of-mouth and social emulation spur rapid growth. Of course, some innovations sputter out altogether and never complete the cycle. eBay could go either way (so could the internet itself). I suppose we all have our own ideas about the future, but my gut tells me that internet auctions have an incredible future awaiting, on a global scale ... and that eBay will ultimately rule in this venue. I have to admit though that I am prejudiced because I personally love this whole new thing ... and eBay. I enjoyed your post. Regards, JC

To: mrknowitall who wrote (4188)	7/22/1999 5:36:00 PM
From: Doug Fowler	Read Replies (3) \| Respond to of 7772

Excellent post, Mr. K ! This is where I believe eBay needs to make a big effort - perhaps through road shows in major cities. It is VERY easy to find out how much something is going for on eBay. Simply search for expired auctions, and you will see exactly what others paid to buy it using eBay auctions. (I use eBay this way all the time for notebook computers, pottery, etc.) As far as price: one of the big draws of eBay is that in the vast majority of cases, you get a pretty good deal. People come to eBay expecting to find a bargain. (Most people pay $49.95 for our Spector software. However, we offer it for $29.95 on eBay. We get good exposure, our margins are still healthy, and they get 40 percent off what they would normally pay, so everybody wins.) On both of the above issues, eBay needs to work to educate those who are skeptical. (It is interesting that you say that many people are afraid of auctions because they think they will overpay. I have always felt that an auction is a great place to get a bargain.)