Why is Ebay Thriving When So Many Other Dot-coms Have Struggled?
Last year, eBay's profits jumped 176%, to $250 million, on a 62% rise in sales, to $1.2 billion. That represents its commissions and fees on nearly $15 billion in gross merchandise sales. This year, analysts expect eBay's revenues to climb 60%, to $1.9 billion. Why is eBay thriving when so many other dot-coms have struggled? It continues to excel at its basic business proposition. "At our core," says CEO Margaret C. Whitman, "we help make inefficient markets efficient." In these tough times, that simple message resonates with just about everyone, from eBay's collectibles merchants to newer sellers such as IBM and Sears Roebuck, which are unloading everything from laptop computers to miter saws. What makes eBay unique is not just that it used the Internet to set up a virtual marketplace. Its customers, to a large extent, create the business. After an eBay manager noticed listings for real cars in its die-cast cars category, for instance, the company created a new category for them. Now, eBay's sales of more than 300,000 cars make it the largest U.S. used-car dealer online or off, surpassing even AutoNation Inc. And in January, after spying listings for restaurant gear and medical equipment, eBay opened a site aimed at the $1 trillion market for industrial goods. The company's next big push: taking its efficiency drive abroad. [Full Story: eBay Rules - BusinessWeek]
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