I’m glad to say that I bought some stock in eBay over a year ago. The price is now at $88.00 and climbing. I’m not usually very good at picking stocks, but in the case of eBay it seemed like a no-brainer. The more that people discover eBay and use it, the more money eBay’ll make. Basically, they are simply charging a transaction fee for people to sell goods to a worldwide audience. Obviously, the more transactions they have the more money they’ll make. And the odds of a competitor cropping up are virtually nil (after all what idiot would sell goods on a competitor site that had less users?),
And it appears from Robert Scoble’s encounter with an unnamed eBay executive that they are expecting the profitability trend to continue. Still, I don’t usually put much emphasis on information like that garnered by Scoble; you don’t know who the guy was and whether he was really telling the full story. But I use eBay and I can see how easy it makes selling and buying virtually anything. So, my decision to invest in eBay is simply a derivative of Peter Lynch’s admonition that people should only invest in things that they understand (but see this blog post that addresses Peter Lynch’s advice in the context of eBay).
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