Tuesday, June 03, 2008

Auctions on eBay: A Dying Breed: Financial News - Yahoo! Finance

Auctions on eBay: A Dying Breed: Financial News - Yahoo! Finance

Given that I plugged eBay a while back for having Microsoft like economics, I've elicited a lot of feedback from folks. While eBay had the chance to be the next Microsoft, I fear their management will go down in history as killing the goose that laid the golden egg. Instead of executing on international growth and expanding the platform with new innovations, eBay has grown through continued price gouging of their core customers. They have, in fact, behaved like most economists fear a monopolist would.
However, we don't need the government to fix things with anti-trust lawsuits. Free markets are taking care of the problem, as competitors capitalize on the opportunity created when eBay prices at the marginal point of indifference. Had eBay left prices alone, they would never have been exposed to such risks, but greed appears to have gotten the better of wisdom.

1 comment:

Marwan Younis said...

Ray, great article by the way. I concur and would like to add that Ebay focused primarily on sustaining technologies like maintaining and improving the e-commerce transaction experience and customer satisfaction. They forgot all about discontinuous technologies. For instance, they didn't successfully integrate social networking (new norm of attracting and retaining customers) as a strategic element of the business model and didn't acquire the appropriate companies to complement their business model like Skype for example.