Saturday, May 06, 2006

Is Ebay slowing up?

The FT today wrote a superb article on whether or not Ebay is slowing up. Ebay has spent the last few days working like mad to persuade an increasingly sceptical investor communty that they can reignite growth and are not at the mercy of slowing ecommerce markets.

For one they argue that the US ecommerce market may be maturing a little, but Europe and Asia still present huge opportunity for growth. OK - we'll grant them that.

Ebay then argue that they are less dependent than ever on auction sales as they rev up fixed sales through Ebay Express, local sales through their acquisition of kijiji (what a name!), listings services (they are leaders in 21 different countries, attracting 19m unique monthly visitors) and diversified product categories. These initiatives all seem solid and should help fuel growth - even though it takes Ebay into direct competition with the likes of Amazon and Google!!

Finally Ebay argue that there is a ton of room for growth left in both PayPal and Skype. And the three brands are three out of the five most powerful brands on the web. I guess Google and Yahoo are the other two. And not Amazon??!!

Apparently PayPal now has loads more members than American Express and we need say nothing more about Skype for they have been written about far too much as it is. (Sorry guys, nothing personal).

So, Ebay have some powerful arguments for why they should keep growing at the speed of light (even if a more geriatric light speed). But the markets yet again didn't buy it again. My gut is that it has nothing to do with Ebay - it all has to do with Google, Yahoo and MSN. For ultimately the markets think that the web will be owned by the three of them and they will compete and commoditise what Ebay does.

It makes me wonder whether our recent advice that Ebay should merge with Amazon might be more relevant than ever.

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