Fool Fight: Amazon vs. eBay

Welcome to another Fool Fight. Grab your ringside seat, please.

Our last bout, which featured Gap and J. Crew, resulted in a knockout for J. Crew thanks to several passionate Motley Fool CAPS players. Today, we're dialed in for a full-contact clash of two digital titans.

Tale of the tape
Let's meet our combatants. In the red corner, it's Amazon (Nasdaq: AMZN  ) , which paid for Wiki wisdom earlier this month, but not before blowing it with its once-promising Customers Vote program. At least top-line growth is accelerating.

Meanwhile, in the blue corner, it's eBay (Nasdaq: EBAY  ) , which made Baidu.com (Nasdaq: BIDU  ) its Chinese bid buddy in November. But that's not why I nominated the stock as the best blue chip for 2007. You can blame improving financials for that.

Get ready to ruuuuummmmmmble!
Who will take the title? Ding! There's the bell! First out of the corner is eBay, with this jab from Fool co-founder David Gardner:

"... You're paying up in the short term for something that looks overvalued, may sell off (will, badly, sometimes). But if you hold an excellent industry leader like eBay, as profitable as it is, you are rewarded. You beat the market. Just watch."

Amazon rolls with the punch, ducks, and then retaliates with a wicked upper cut from Foolish friend Alyce Lomax, who is a CAPS all-star and who goes by TMFLomax here in Fooldom:

"I know the low profit margins are disturbing and recent ideas like offering products like groceries have people concerned Jeff Bezos and his company have jumped the shark, so to speak. However, I think it's a mistake to look at Amazon as simply a retailer. ... Its My Media Library area helped give me further confidence that Amazon's setting a smart foundation for where e-commerce is heading. Furthermore, when it gets more digital content ready for prime time, the picture will be complete (and it will be able to drive higher margin sales). I think Amazon is setting itself up very well for the future, and lots of investors are underestimating this company's future relevance and growth potential."

And eBay is cut! It's a bad cut, too. Give that round to Amazon. But then the bell rings and an opening appears. Rex Moore, known around here as TMFOrangeblood, delivers the haymaker for eBay:

"Now 20% off recent highs, I think this is an excellent time to buy one of the top companies in the world. Though sometimes it swings and misses, management has shown an ability to stay on the cutting edge of marketplace technology. The world's largest buying and selling platform will still be that a decade from now."

Down goes Amazon! Down goes Amazon! Bruised, battered, and wobbly-kneed, the e-tailer reels at the words of one of my favorite Fools, all-star CAPS player BBQPorkMogul:

"Time to pick up some positivity going into Christmas, then dump this debt-laden overhyped retailer that is so desperate for growth that it made the huge mistake of getting into grocery sales ..."

Let's go to the scorecard
eBay easily dodges the weakened Amazon and delivers a number of thunderous body blows in return. The bearish sentiment results in another vicious knockdown. As CEO Meg Whitman returns to her corner, the ref begins his count. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 -- you're out! Better get the smelling salts. Bezos is out cold:

Metric

Amazon

eBay

Total ratings

528

1,407

Bullish ratings

384

1,244

Bull ratio

72.7%

88.4%

Bearish ratings

144

163

Bear ratio

27.3%

11.6%

Bullish pitches

90

336

Bearish pitches

30

42

Data current as of Dec. 20, 2006.

Get in the ring!
What do you think about these two online retail giants? Get in the game now and give us your take. Click here to rate the stocks right now. It's entirely free. Your Fool cap is waiting.

Amazon, Gap, and eBay are Motley Fool Stock Advisor selections. Ask us for an all-access pass and you'll get a backstage look at all of the stocks that are helping David and Tom Gardner beat the S&P 500 by more than 38% as of this writing. It's free for 30 days. All you have to lose is the prospect of a richer portfolio.

Fool contributor Tim Beyers has 30 picks in his CAPS portfolio, including eBay. He didn't own shares of any of the companies mentioned in this story at the time of publication. Get the skinny on all of Tim's stock holdings by checking his Fool profile. Gap is also an Inside Value choice. Baidu.com is a Rule Breakers pick. The Motley Fool's disclosure policy is always in fighting shape.


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