Ebay, Inc. Nasdaq: EBAY Branch: Etailers and Online Markets

Profile:
Ebay is the biggest consumer to consumer online auction site. In an auction you can bid on goods that are put out for sale by others. It is fun to do and you can also see what others are willing to pay for certain goods. Ebay is the biggest online auction with millions of goods or bids at the same time. There is a time limit on the bidding so things can get pretty exciting when the bidding closes out. Of course you have to trust the seller because he has to deliver, not Ebay. Ebay does not have inventories. The company merely takes a percentage of each trade and item for sale. But with millions of bids this is very profitable.

Ebay got some bad press when people tried to sell some strange things on the site: guns, cocaine, a corpse, babies, weird animals, a kidney, a testicle (we don't know if it was a right or left testicle) and Ebay itself. The Ebay "police" will stop those people because it is either confusing or illegal. They also have a rating system for sellers. Trustworthy sellers get higher ratings. Ebay was so successful that Yahoo and Amazon quickly introduced auctions themselves. But Ebay now has local sites. Local sites provide better communication between sellers and buyers. We think Ebay is here to stay.

 

Management:
A woman runs the show here. She's not as pretty as Marimba's CEO but we have a lot of faith in her. She is not the fastest moving person on the Web, but for Ebay this is good. The company is maturing nicely and in the end it is the customer who decides where to bid.

 

 

Meg Whitman

Started: September 1995 on Labor Day
IPO: 11 August 1998

Ebay on the Web:
main page: http://www.ebay.com
investor relations: click here
current stock price: click here

Cool !

Not so cool...
  • By far the biggest auction site. You will find almost anything here
  • Ebay also offers higher priced goods like cars and art
  • Local site approach is very promising
  • Ebay had some system outages, very painful
  • Competition is fierce but still lagging
  • No business auctions

Main competitors:
Competition breaks down into 2 groups:

 

Propus personal view:
Ebay has this thing called "first mover advantage". Its success is overwhelming and it is still the biggest site. Bidding at Ebay can be addictive and is almost a national sport in the US. Nobody knows exactly what the company is worth but we do know that Ebay has a profitable business model. It is a volatile stock but it should be in every Internet portfolio. In a couple of years Ebay will be "in a town near you" with local sites and we bet that will be successful too.