Robert Scoble talkd to an eBay exeuctive on a flight and gathered this info:
$7 to $8 billion runs through the eBay platform (yes, he called eBay a “platform”) every quarter. Every hour eBay registers 3000 to 4000 new users. This year they are expecting somewhere around $3.5 billion in revenues. That’s above expectations. Every day about a terabyte of data courses through eBay’s data centers (most of the machines running eBay are running Windows, he told me. The back end they use is running on Sun Microsystems computers). eBay has a high degree of customer lockin. How? Well, for one, many of their customers are getting rich (he says he knows a few power sellers who have already retired). Second, the more you buy and sell on eBay, the better your ratings, and those aren’t transferable to other auction systems.
USA Today wrote recently on the eBay ecosystem.
Bill Miller had an interesting perspective on eBay’s growth, comparing it with Microsoft at the same time in the latter’s history:
The question on eBay is simple: how long will the growth continue, and at what rate? That will determine whether it is like Microsoft in 1990, a bargain, or like most companies with high expected growth rates, a dud. Part of the answer lies in the description.
What is eBay’s business? If it is an auction site where individuals, mostly, sell unwanted items sort of like an Internet enabled flea market then it probably is fully priced. That is not how the company describes its business, though. Here is eBay’s description of what it does: “We make inefficient markets efficient.” For those who can size markets, that is all you need to know, if you believe it.
I got Microsoft totally wrong in 1990. It was a great value, and no value investors owned it. It looked expensive; it wasn’t. EBay looks expensive too. Mulligan.
He adds about the cryptic reference to Mulligan: “‘Mulligan’ in golf refers to a second shot you can take without penalty. Like a second chance to correct a
mistake; a do-over.”