eBay, Inc. (NASDAQ:EBAY)
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Offering a forum for the buying and selling of stuff, eBay is the world’s largest online marketplace.
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Offering a forum for the buying and selling of stuff, eBay is the world’s largest online marketplace.
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I'm late to the party on this one, as evidenced by the 68% YTD increase. However I'm making my bet here largely due to PayPal and the payments portion of eBay's organization. Payments now makes up 40.1% of eBay's revenues (for Q32012), up from 37% last year. Mobile commerce continues to depend heavily on secure, reliable payment methods and PayPal is simply the most-recognizable brand in the mix. Google has their hat in the ring along with others, but none are matching PayPal in market share.With all this said about payments, the eBay marketplace segment is still growing (surprisingly). I've switched almost entirely away from EBAY to AMZN, yet the data shows YTD revenue growth at 9.8% YOY.Between the strong marketplace growth and my belief in PayPal and the payments segment, I think this is a great bet on mobile commerce.
I bought into EBAY a year ago partly based on my personal practice of looking for something on Amazon then buying the same thing for less on Ebay. Amazon's search is better. But more often than not, I can find a seller on Ebay who has a lower price for the identical item.
Since then I've become more cognizant of the difference between their business models. Ebay is in the business of bringing willing sellers and buyers together, Amazon is in the business of selling stuff. Over the long haul as e-commerce progresses beyond its infancy, I see more potential in the former than the latter if done properly. Yes, one could say that approach is like investing in a flea market rather than the Walmart next door. But the main reason Walmart puts flea markets out of business is brute force supply chain efficiency, which applies a great deal less in an e-commerce world.
Both are works in progress and have a lot of room for improvement and either could stumble.
One other thing concerns me about Amazon. It seems that Bezos' long term vision revolves around forgoing profit in the short term in order to become the eight hundred pound gorilla in the long term. That's ok, and a lot of investors seem to agree with him which accounts for AMZN's astronomical P/E ratio. But if one becomes an eight hundred pound gorilla in a world where eight hundred pound gorillas are irrelevant, it was a huge mistake.
I'm sticking with EBAY for now.
Printing724,
I tend to agree with you RE: flea market vs. Wal-Mart....however...
I'm a green-thumb on both EBAY and AMZN. Bezos simply has too much going for him. There has always been room in the marketplace for pawnshops/flea markets/bazaars alongside the traditional stores and retailers.
Nice work on the real-money play here with EBAY. I think it's a strong company with a lot of long term upside!