POST OF THE DAY
Gorilla Game
eBay a Gorilla?

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By Y2Krash
June 8, 2001

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There is much to a successful trading platform. User Interface. Categorization. Searching. Auction rules and execution. User qualification. User management. Billing. Security ...

eBay is the only company with the 'whole product' worked out enough to work b2c and b2b. This gives them huge barriers to entry. The fact that they are now licensing this technology to other companies is what moves them into a possible Gorilla Game.

Paul



Bravo Paul,

You're one of the few people I've seen that has the same view of eBay as myself. Most individuals look at the company and see a giant online garage sale. However, if we look a little deeper, a new picture begins to emerge, one that shows a company that has leveraged the Internet better than any other that I've ever seen. As you stated, the company's recent developments place it at a critical point in its history. It's reached a crucial fork in the road that, if navigated correctly, places the company on the verge of greatness.

Ever since I first read about the collaboration with Microsoft and .NET, I've been formulating my theory for eBay as a potential Gorilla, which I had planned to publish in an upcoming issue of the RTW newsletter. The company has now released its API to third party developers in hopes that others will build on top of the eBay platform and eventually making it the operating system for all online auctions. By offering its technology as a SOAP-based XML Web service through .Net, other web sites can integrate eBay's auction technology into their own sites and even host their own eBay auctions. This deal also gives the company access to the millions of Microsoft developers around the world, something that is sure to speed the process of becoming a worldwide standard.

There's no doubt that eBay's stock is expensive but I personally believe that it's worth every penny. There are very few companies around that control 80% of a market with enormous barriers to entry and an opportunity that is virtually limitless. Furthermore, on top of potentially becoming the standard for auctions, eBay is actually becoming a legitimate distribution channel in itself. I've actually heard talk of eBay becoming the fourth distribution channel (after retail, e-tail and catalogue). Never before has a single company had the chance to control an entire distribution channel and profit from everything sold through it.

Forget about eBay's 2005 goal of $3 billion in revenues and try to imagine what this company could become by 2010. If the company can maintain its current momentum then I firmly believe that it could emerge as one of the most important companies of the next decade.

I would encourage everyone on this board to throw away their preconceived notions of what eBay is and try to image what eBay could become. It will amaze you, I promise.

Matt