Thursday, April 20, 2006

eBay's growth and competitive threats

Robert Hof at BusinessWeek writes about "eBay's Diminished Expectations" and competitive threats to eBay. An excerpt:
Some sellers have reported for some time that their profit margins on eBay are eroding. That's one factor that has prompted some of them to move some of their inventory to other marketplaces, such as,, and Google Base.

What's more, search giant Google is coming on strong. Its free Google Base listings service, coupled with a new payment system, threatens to undercut eBay by offering merchants a cheaper venue on which to sell.
See also my previous posts, "Google and eBay pursue sellers", "Disintermediation of eBay", and "eBay's search for sellers".

Update: Reports leak out that eBay is considering teaming up with Microsoft or Yahoo against Google.

Update: Five months later, a BusinessWeek article reports the eBay "magic is gone ... Shoppers are simply not buying all the inventory anymore. Some items languish without a single bidder. Many shoppers opt for other sites including, use sophisticated search engines such as Google and Yahoo!, or head to store sites directly."

Update: Eighteen months later, Saul Hansell at the NYT reports that "sellers have become disenchanted with eBay" and "eBay is looking to reduce its listing fees and raise its final value fees ... [but] given the depth of the anger against the company, I wonder if that will be enough."

1 comment:

Scott said...

I've often wondered what sort of volume Google Base does selling-wise. I imagine very light, especially considered to eBay. Outside of the techie/nerd crowd, I don't think many folks know about Google Base, but are quite cognizant of eBay. In fact, I'd say that's true for most of Google's features, save its search capabilities. (E.g., my parents don't know about GMail, Google Base, Google Calendar, Google Reader, Froogle, etc., but do use the word "Google" interchangably with the term "Internet search.")