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

To: Stewart Elliot who wrote (2837)	4/25/1999 11:55:00 PM
From: puborectalis	Respond to of 7772

EBAY mon apr 26 consensus .02 whisper .03 (broke out at 191) looks like 300 is around the corner

To: Stewart Elliot who wrote (2837)	4/26/1999 1:47:00 AM
From: Jing Qian	Respond to of 7772

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. Agree. Unlike Microsoft, EBAY does not have a monopoly to protect itself. Disagree. eBay has a loyal community of 2 million registered buyers/sellers that should be considered a monopoly to protect them. In e-commerce arena as opposed to traditional commerce arena, community is a new form of monopoly that has never existed before. So you don't see that. 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. Disagree. It's inappropriate to compare eBay to an traditional company like Ford. The difference is, the community distribute the goods for eBay. But Ford distribute the goods for the community(the entire world). That's why Ford was vulnerable and weak. That's why the GM vs. Ford saga will not repeat here to eBay. 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. Disagree. With the power of eBay's community, it has already established a monopoly firewall to ward off any competitors. Yahoo! Auction tried to beat eBay with the thought that free auction will be a killer. Not! Yahoo! Auction has been a complete failure. Amazon.com is trying too, but they will not be so successful either although will be in better shape than Yahoo Auction. It is too late for Amazon now. So, there will simply not be any competitor which can come close to the "critical mass" of eBay level to dent eBay. Unless eBay's management screw up big time or start to do nothing for a year. 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. Your logic applies to traditional distribution oriented model or product oriented model, but not apply well to eBay's non-fulfillment model and non-product oriented model. If the competitor is late for a year, its fate is simply sealed to be a loser. The barrier is too high for any competitor to catch up in the auction market, thanks to the power of community. The rule of the business is fundamentally changed with the advent of community concept. This concept is so new that you don't learn it Harvard B-School. And by harnessing this power, eBay can stay ahead for good. > 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. Maybe to you I am hyping. Forgive me for that. I was only trying to express my vision of unlimited scalability of eBay's business model. Since the scalability is unlimited, the world is probably too small for eBay...