TulipTools Internet Business Owners and Online Sellers Community

Quote:B2: Why the pessimism about growth in the U.S., then? Is it that all the low-hanging fruit in online advertising and search has been plucked? Or put another way, why do you see growth that the big players aren't expecting?
Wingo:Well, eBay has hit some issues that are causing them pains in their core auction business. However, this quarter Amazon actually saw accelerating growth in their core U.S. media business.

B2: Are those related - Amazon taking share from eBay?
Wingo: Open to personal interpretation, I tend to think it is. Last fall, eBay raised their store fees to the point that it cut off the 'long tail' kinds of product - items you would sell 2 to 10 a year of, but made it up by putting 100,000 to a million of them out there. At the same time, Amazon threw open its doors to medium-sized third-parties via its Merchants@ with a model that has no listing fees and just a percentage of sales business model.

B2: What effect did that have?
Wingo: Lots of long-tail inventory moved from eBay to Amazon. I think Amazon is seeing the benefits of a much larger selection now and eBay is feeling the pain of a trimmed-down selection.

Quote: eBay is a major stakeholder in ChannelAdvisor. You could safely say that the two entities are closely aligned. What poses an odd scenario to me is, wouldn't it appear to the casual observer that eBay is therefore underwriting the success of their closest competitor, especially in light of the fact that ChannelAdvisor is ratcheting the performance of Amazon (NASDAQ: AMZN) above that of rival eBay? I don't get it. Do you?

What occurs to me is that eBay has a vision for itself that it's just not telling us about yet. Does it see itself basing future operations on a different retailing tier than Amazon? Does it plan to make an overture for Amazon at some point down the road? Or does it see itself and Amazon as co-existing within the retail realm with the expectation that there is enough revenue to go around? ...