In the competitive spirit of college basketball's annual championship tournament, The Motley Fool brings you Stock Madness 2007! Our writers are making head-to-head arguments for their chosen stocks (but not necessarily investment recommendations -- this is, after all, a game), and you'll pick the winners with your article recommendations and Motley Fool CAPS ratings. Who will win the right to cut down the net? Let's tip things off and find out!

There are several reasons why eBay (NASDAQ:EBAY) is the superior investment to Intel (NASDAQ:INTC).

  • Intel is in the cutthroat chip space where markups can be meager as it competes against a pesky AMD (NYSE:AMD). On the other hand, pricing elasticity defines eBay. It has been able to grow its user base even with perpetual hikes and the fading existence of cheaper consumer-to-consumer auction sites. eBay's PayPal has survived the promotional ways of Google's (NASDAQ:GOOG) Checkout.
  • Intel is spending $6 billion a year in R&D to keep AMD off its back. eBay has scaled to the point where it's no longer in need of its greenbacks and it's using them to reward shareholders. Even the fast-growing Skype bled through a capital budget of just $2.5 million last year.
  • Intel's earnings history has been rockier than Balboa, while eBay has been a consistently dependable grower.

One would expect to pay a king's ransom for the world's leading online marketplace. In the past, that would have been the only way to hop on eBay's coattails. Things are different now. The company continues to grow, yet is somehow trading at just 21 times next year's profit projections.

You would expect to pay that much -- or possibly less -- for a cyclical player like Intel that actually saw its top and bottom lines dip last year. However, eBay's been a perpetual grower.

Are you telling me that you're not willing to fork over 21 times the 2008 income target for a company with more verbs than anyone else? Let's see how eBay's three biggest verbs grew their revenues this past quarter:

  • eBay's namesake marketplace business was up 24%
  • PayPal was up 37%
  • Skype was up 162%

The company is looking for revenues and profits to grow in the 20% range in 2007. That's fine, though I like eBay's chances here. The company has always erred on the conservative side in providing guidance. It has blown past analyst estimate the last two quarters and you have to go all the way back to 2004 to find the last time that the "It" company came up short.

More than just the verbs you know
I also like a lot of eBay's smaller sites. It owns,, and StubHub, and has a 25% stake in Craigslist. It may never need to tap those channels for growth. That's the luxury of housing 610 million auctions, watching over 133 million PayPal accounts, and serving 171 million Skype members this past quarter.

Take something like eBay Motors. CarMax (NYSE:KMX) sold 310,789 new and used cars in fiscal 2006. AutoNation (NYSE:AN) moved 595,176 off its lots last year. They are both awesome brands and great at what they do. Does eBay Motors stack up to these two juggernauts? You bet. It helped facilitate two million transactions in 2006.

Bringing this all back around, I'm sure that many Intel-based computers and laptops are swapped for cash on eBay every day. Intel may not like that. It would probably want folks to buy new machines (which, of course, are also available on eBay). But this helps explain why eBay is a proven recession-resistant winner.

It's the right call for your portfolio.

Does eBay deserve to move onto the next round? If so, simply follow this link and rank the stock "outperform" in Motley Fool CAPS. If you want to rain on my parade, vote it "underperform." Later this week, we'll tally your votes to determine which stocks will advance one step closer to the title.

Read our opposing article on Intel, or see all of the other entries in this tournament.

eBay is an active recommendations in the Stock Advisor newsletter service. You're welcome to read up why with a free 30-day pass to access all of the newsletter's content services including a lively subscriber-only discussion board. Intel and CarMax are Inside Value picks.

Longtime Fool contributor Rick Munarriz is a satisfied eBay user with the 171 positive feedback rating to show for it. He does not own shares in any of the companies in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.