Cracking Open the Door at eBay

By Rick Aristotle Munarriz | More Articles
June 17, 2008 | Comments (3)

Competition can teach you a lot, especially if you make a habit of buying out your smarter rivals.

That's what happened when Crocs (Nasdaq: CROX ) noticed a husband-and-wife team running a company, Jibbitz, that sold character clip-ons that fit into the holes of Crocs' resin shoes. Crocs acquired the company. Oracle (Nasdaq: ORCL ) has done the same in the enterprise-software space. And when Photobucket became the photo-sharing option of choice on News Corp.'s (NYSE: NWS ) MySpace, the social-networking site blocked the app before acquiring it outright.

Then you have eBay (Nasdaq: EBAY ) turning this practice into an art form. When its own payment platform wasn't as popular as PayPal, it bought PayPal. When StubHub began catching on as an effective way to sell live event tickets, it bought StubHub.

Now we have eBay's announcement yesterday that it's opening up its Selling Manager platform to outside developers. Some 700,000 of eBay's biggest sellers use Selling Manager as a way to increase the effectiveness of the auction-listing and fulfillment processes. Giving developers a chance to build better mousetraps, by way of providing active sellers with improved tools, is ingenious, and I fully expect eBay to reward the more popular third-party applications with buyouts.

Sellers win with this partnership because it will create an improved selling experience. Developers win because they get their wares out there. And eBay wins because it makes its website stickier for power sellers.

After widget capability launched on Facebook last year, it wasn't long before large companies stepped in to acquire some of the more popular widgets, such as "Favorite Peeps" and "Extended Info." Expedia's (Nasdaq: EXPE ) TripAdivsor.com bought the "Where I've Been" widget last summer. eBay won't be as passive. It's an acquirer. It takes its own "Buy It Now" motto to heart.

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Crocs is a Motley Fool Hidden Gems Pay Dirt pick. eBay is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz is a satisfied eBay user, with 173 positive feedbacks to show for it. He does not own shares in any of the companies in this story, save for Crocs. He is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (1)

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Report this Comment On June 17, 2008, at 2:13 PM, UnhappyEbayer wrote:

Ebay is causing sellers to leave in droves, with the new policy changes and tens of thousands are upset and will be protesting at Ebay Live 2008, this week.
The changes are idiotic. Sellers can no longer leave negative or neutral feedback, even if a buyer bids, wins your item, ingores your emails and doesn't pay. What right do they have to leave any feedback, if no transaction has taken place? We have sellers, bidding on competitors items and ruining their feedback, just to get a boost, on their own items.
Ebay went in and retroactively turned all neutrals, to negatives. Neutral, means just that, how can ebay call neitral, negative? They swtarted giving new discounts to people with good ratings, but they knock them down first, with the neutral change, so that many can't even meet the requirements, for the discount.
That is not the worst of it. We have thousands and thousands of sellers, who have closed their stores and we KNOW that the listing count should be going down. But, we have uncovered the source of the raised listing counts and I can't see it being anything, but fraud.
The seller BUY or Buy.com was taken on by ebay, right at the time ebay KNEW they were going to lose sellers. They are using buy.com, to pad the listings, to make it look like the count is up, when it really isn't. We have found thousands upon thousands of fake listings, that have no description and you can't even buy them. I found them ending tens of thousands of listings early, saying they are no longer available for sale and then immediately relisting them. Most likely to keep the sell through rate up and then relisting them again, to up the listing count 2 fold. They don't even pay any fees, being owned by ebay, so all the listings that they are padding, aren't even bringing in revenue???? Something isn't right here!
Isn't this making the stockholders think that listings are up, when they really aren't? We have all the proof documented. I even have it documented of when I was talking to Ebay Live Help and asking them about all the ads, being ended early and it immediately stopped, when they found out that we knew about it.
Please help us in exposing them, for what they are trying to pull. The boycotters should have a fair chance, to show what is really going on, behind the scenes.
Thank You
Tracy Fair and thousands of other ebay sellers.
P.S. You can find the revolt going on at:
http://forums.ebay.com/db2/forum.jspa?forumID=113
Report this Comment On June 17, 2008, at 2:14 PM, UnhappyEbayer wrote:

Stockholders will be in for a big shock, on the 2nd quarter earnings!
Report this Comment On June 21, 2008, at 7:01 PM, trice193 wrote:

It really dosn't matter what earning are ebay is very much undervalued. When compared to yahoo which buy out offer was great then ebay's market cap which just don't make sense ebay is still a much better finacially off and asset company then yahoo. Paypal alone is worth a good percentage of market cap of company

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