Buy It Now, iPhone Lovers

Can some of Apple's (Nasdaq: AAPL  ) magic rub off on eBay (Nasdaq: EBAY  ) ?

The leading auctioneer certainly hopes so, taking the stage yesterday during Apple's Worldwide Developers Conference to show off its new iPhone application.

The techies at eBay needed only five weeks to develop the application, which allows users to search eBay, add items to their watch lists, and bid on the listings they covet. Unlike some of the other programs demonstrated yesterday, eBay's offering will be absolutely free.

You probably wouldn't expect a cover charge for a program that drums up self-serving business -- just as last week's introduction of discount broker E*Trade's (Nasdaq: ETFC  ) mobile trading platform for Research In Motion's (Nasdaq: RIMM  ) BlackBerry is also a freebie. Still, you have to give eBay credit for realizing that sharing the stage with Apple harvester Steve Jobs is usually a good thing.

With 6 million iPhone owners on board, likely to be joined by millions more when the new $199 models hit the market, this is a growing market that any forward-thinking company would be nuts to ignore.

Why wouldn't iPhone enthusaists want regular updates on the pursuit of a Hank Aaron baseball card or an autographed John Grisham novel along with their usual email? Surfing the Web on smartphones makes such access possible, but sharp developers are drumming up wireless applications to make the process quicker and seamless.

You won't find a company with bigger incentives than eBay to make this work. Free online classified sites like Craigslist, Wal-Mart's (NYSE: WMT  ) recent Oodle tie-in, and eBay's own Kijiji don't cash in on listings or completed auctions. Smaller consumer-to-consumer auction sites offered by companies like Amazon.com (Nasdaq: AMZN  ) and Overstock.com (Nasdaq: OSTK  ) don't have the trading volume. eBay also has the PayPal payment platform, stacking even more revenue-generating potential on top of successful transactions.

On the flip side, there will be a ton of companies competing to launch popular iPhone applications, the same way that developers have been angling for Facebook facetime for their apps since last year.

This isn't a slam dunk for eBay, but at least it's nice to see the online auctioneer take a shot.

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Wal-Mart is a Motley Fool Inside Value recommendation. eBay, Amazon.com, and Apple are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz can't believe that he's actually looking forward to an eBay application. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy has a five-star rating.


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