While dot-coms crashed all around us during the late '90s, Ebay has become the underground economy of the New Millenium. Garage sales used to be the weapon of choice when it was time to raise some fast cash. Now, Ebay provides people in need of funds with a greater and much more lucrative range.
EBay's ability to efficiently satisfy even the most eccentric desires of shoppers -- and match them with sellers -- is one reason the company appears recession-proof. The company recently said its second-quarter profit more than doubled to $54.3 million as its revenue jumped 47 percent, to $266.3 million. While sellers, from whom eBay collects commissions and listing fees, post millions of items every day on the site, demand from bargain hunters and collectors of the arcane runs just as high.
EBay's shares are down 20 percent for the year as some analysts and investors have questioned the company's lofty market value, but its shares have fared better than many Internet and technology companies. The tech-heavy Nasdaq Composite Index was down 38 percent for the year as of yesterday's close. While the bursting of the Internet bubble and broader worries about the tech sector have punished many Internet stocks, eBay's shares have held up relatively well, rising 5 percent in the past two years.
The liquidity and global reach of the eBay marketplace has made the site a kind of commodities exchange for everything -- including items that would otherwise be destined for the Dumpster. There are many other sites for selling used goods over the Internet, including Yahoo Inc. and Amazon.com Inc., but eBay is by far the dominant player in the category, with an estimated market share of more than 90 percent.
I've dabbled on Ebay for a couple of years now, and have made some interesting purchases. What amazes me is the scope of goods available. If you're looking for something, no matter how arcane or rare, chances are very good that someone is selling it on Ebay. It's the perfect business plan, really- no inventory to move, and comparatively little overhead. All Ebay does is bring people together. Their continued success speaks to the garage-sale gene in all of us, I suppose.
