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It's an interesting idea, but let's not forget that both Yahoo and Amazon
tried to compete with eBay's auction format head to head -- at a time when
those companies were as big and full of money as eBay was. Neither was terribly
successful. Now Google is the big boy on the information super highway and
feelin' pretty sassy -- but that is as a *search* engine -- not as an
auction site and not as a mass-market retail venue (which is what so much of
eBay has become, what with so many fixed-price retail items just masquerading on
eBay as "auctions"). It's a big step from search engine (providing -- for free
-- information that people are looking for) to selling stuff
online (convincing people to buy stuff they don't necessarily need and
getting them to cough up real money during the process). There's a big
difference.
If Google creates what amount to a global "classified want-ad newspaper" on
the internet -- just a variation on the retail format -- rather than true
auctions, they can probably make a dent in eBay's ranks of devoted sellers and
buyers. But if they try to do genuine auctions, they will almost certainly
fail because of the psychological dynamic: True auctions require some risk on
the part of the seller -- that he can start his item off low at a mouth-watering
bargain bid and yet that enough people will see and bid on that item during
the short 7 days it is running to push that low opening bid up to a price
where the seller can actually make real money and not just give stuff
away. It took eBay many years to develop that massive pool of bidders --
and the only reason they were so successful at it because they were the
FIRST on the spot to fully realize the potential of internet auctions. It was a
classic case of being in the right place at the right time.
All other companies who have tried to emulate the
we-auction-everything-and-anything format have found that eBay's head start in
this market was insurmountable. I suspect Google would run into the same
problem. Just because people use you to search for information on the internet
for free does not mean they are going to use you to buy or sell at
auction.
Not that some serious competition wouldn't be good for eBay.
-- JR
----- Original Message -----
Sent: Wednesday, October 26, 2005
19:48
Subject: [MOPO] EBay Stock Falls on
Concern That Google May Soon Add Online Auctions
EBay Stock Falls on Concern That Google May Soon Add
Online
Auctions
Oct. 25 (Bloomberg) --
Shares of EBay Inc., the world's
largest Internet
auctioneer, fell as much as 5.6 percent on
concern
Google Inc. may soon introduce a new feature that
allows users
to sell products online.
Bear Stearns Cos. analyst Robert Peck said
today in a
note that Google has been testing a Web site that
looked like
an on online marketplace, similar to that
of San Jose, California-based
EBay. Peck cited screen
shots of a product called Google Base that were
posted
on a Web log.
``Should this proposed product be utilized
as
speculated, we would think that it is a large
incremental positive
for Google and a large
incremental negative for EBay,'' Peck wrote today.
He
said he had been unable to confirm the plans with
the
company.
The move signals Google's intention to expand
further
beyond Web search. Adding online auctions or sales
would enable
Mountain View, California-based Google to
tap its base of 400 million
monthly users, posing a
threat to EBay. Chief Executive Officer Eric
Schmidt
said in June that Google is developing a payment
service. That
may rival EBay's PayPal payment product.
Google spokespeople Steve
Langdon and Lynn Fox didn't
immediately return calls seeking comment. EBay
doesn't
comment on rumors or speculation, spokesman Hani Durzy
said in
an e-mail.
EBay shares fell $1.85 to $37.57 at 12:57 p.m. in
Nasdaq
Stock Market composite trading. They fell 32
percent this year before
today. Google shares fell
$3.53 to $345.12, after rising 81 percent this
year
before today.
Peck cut his recommendation on Ebay shares
to
``peerperform'' from ``outperform'' in September. At
the time he
discussed the possibility of Google
starting a rival product.
Peck
wasn't available for an interview, Bear
spokeswoman Monica Orbe
said.
Classified Ads?
Google may use Google Base as a classified
ads site,
UBS AG analyst Benjamin Schachter said in a report.
That would
compete with EBay and sites such as
Craigslist.com, he said.
The
screen shots showed a page that enabled users to
input details of a product
for sale. ``Google Base is
Googles' database into which you can add all
types of
content. We'll host your content and make it
searchable for
free,'' the site says, according to the
screen shots cited by Peck and
Schachter.
Google's users rose 38 percent in August, according
to
Reston, Virginia-based ComScore Networks Inc.
EBay said Oct. 19
that listings rose 32 percent in the
third quarter to 458.6 million and
registered users
rose 35 percent to 168.1 million. PayPal had
86.6
million total accounts at the end of the period, 53
percent more
than a year ago.
To contact the reporter on this
story:
Jonathan Thaw in Los Angeles at [EMAIL PROTECTED]
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