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

To: Jing Qian who wrote (2825)	4/25/1999 11:52:00 PM
From: Stewart Elliot	Read Replies (2) \| Respond to of 7772

> I heard this comment from people so many times, maybe 100 times. and you'll hear a few hundred more. Only recently have any serious attempts been made at competing with ebay. The jury is out. It usually takes a significant amount of time for competitors to challenge the incumbent. Unlike Microsoft, EBAY does not have a monopoly to protect itself. Using your logic tells me that Ford should be the only big automobile company (GM eventually went on to become double Ford's size). And Sears is the only big retailer (WalMart is now more than double the size of Sears). And the list goes on. I know, this time is different. Critical mass is hit for a auction site at some unknown number. Who knows what that number is - it could be 500K auctions, it could be 1MM. If a challenger hits critical mass, price competition will* be an issue for ebay - it happens in every market. For now, EBAY does not face this pressure. With your logic, EBAY should charge double or triple its current rates - why not, nobody will take the market away from them. Being first to market is no guarantee of success. In any event, real competitors eventually enter the market, and force the leaders to either improve value, or cut prices. It eventually happens in every market. For now, first to market for an internet company is worth gold - that is unquestioned. Once the internet market matures, ebay will face the same challenges that every company faces in their own respective markets. Incredible growth rates are not a sign of invincibility. > You said Internet is a hype. I most certainly did not say the internet was hype - when it comes to the internet, I'm as enthusiastic as anyone. I am more cautious than others about the long term valuations of these companies, because this market, like every one before it, eventually succumbs to competitive reality. What is hype is making far fetched comments like that a small internet company is poised to be the most powerful company on earth.