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Will eBay's new merchant offerings be wrong-footed by Amazon, Yahoo and Google? (EBAY, AMZN, YHOO, GOOG)

Jun. 24, 2005 2:08 PM ETGOOG, AABA, EBAY, SHOP-OLD, AMZN1 Comment
David Jackson profile picture
David Jackson

eBay (ticker: EBAY) announced a service that helps merchants build online stores using technology from its Kurant acquisition.
eBay will offer four versions with difffering levels of functionality
and integration with eBay's auction site. All of them will charge
merchants a monthly fee and commission on each sale.

But eBay may be making a mistake charging for this service. Reasons below.

Quick comment:

Hosted web publishing (blogging) software has effectively dropped in
price to zero. Blogger is free, TypePad costs a minimal amount. It will
stay free because Google, Yahoo and Six Apart/Kanoodle will make money
from contextual ads and other services incorporated into content web

The same will happen with hosted e-commerce software. Profits will
come from providing referrals and other services, not from charging for
the software and hosting.

  • eBay will make money by offering lead referral from Shopping.com and eBay.com, and by encouraging use of PayPal.
  • Amazon will make money from referral fees on sales via its web site.
  • Google and Yahoo will make money by integrating tools to buy and
    track the success of pay-per-click ads into hosted e-commerce sofware.
Now, if that's true, why is eBay charging for this service? Amazon
and Yahoo will offer online stores for free to merchants, and eBay will
be wrong-footed.

This article was written by

David Jackson profile picture
I'm the founder and CEO of Seeking Alpha. Before Seeking Alpha, I worked as a technology research analyst for Morgan Stanley in New York. After I left, I wrote The ETF Investing Guide (which you can find by clicking on "Author's Picks" below), and some articles about individual stocks, and then started inviting other people to contribute to the website. Seeking Alpha is now the dominant crowdsourced platform for discussion of stocks and investing, and the only place with coverage of many mid and small cap stocks. I have a B.A from Oxford University and an MSc from The London School of Economics, and am married with five children.

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Comments (1)

Adam Jackson profile picture
Interesting article, even though it's old.
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