All eBay Has To Fear Is eBay Itself

The online auction world shrugged its collective shoulders when two of the biggest competitors of Internet auction powerhouse eBay (Nasdaq: EBAY), Yahoo! Auctions and uBid, announced that they had made a deal to share listings.

The blase reaction proves how entrenched and invincible eBay has become. Right now, it appears that eBay's fiercest competition will come from eBay itself.

And that's something eBay rivals can be optimistic about.

In what seems like overnight fashion, eBay has quickly become as ubiquitous as any company, online or off.

This is not an accident, of course, and it hasn't hurt eBay's stock price one bit. Pervasiveness isn't the goal for every company, but for eBay, which makes its money by enabling sales between others, it's just the ticket.

But how much is too much? Does everyone with something to sell have to put it up for auction on eBay and then tell the world about it? The other day it was guitars and drums from Genesis (the rock band, not the opening chapter of the Bible). Before that, the cars of the rich and famous, 2002 Olympic tickets and the oldest known pair of Levi's Jeans.

Add in TV spots, PBS sponsorships, newspaper ad listings and you get the idea. If this keeps up, eBay overload is just around the corner.

Community Affairs

Meanwhile, eBay is constantly under siege from within. Its sellers are a unique group of people who usually have one thing in common: A love-hate relationship with eBay.

They love the online auctioneer when it sells their items, but then hate the company when even the slightest changes are made to how things operate. eBay sellers also constantly complain about the financial arrangements.

Buyers have fewer complaints, as it turns out.

Happy Town

But a recent incident highlights how difficult it is to keep everyone in the sprawling Internet community that is eBay happy at all times.

What happened was, eBay decided to kick off a seller who aptly called himself "Rabidboy." The company was responding to a number of complaints about the Timothy McVeigh-related items Rabidboy was selling.

Now while the decision drew applause from many corners, it also renewed questions about how eBay is going to determine what and who stays and goes. Community standards usually carry the day, but this is no ordinary community. This is a community brought together to buy and sell stuff.

Fine Line

So what's the right approach? It's easy to say "hands off" and let the buyers and sellers work it out. If people are offended, they'll shun the seller and economics will do its thing.

But that's how Yahoo Auctions! ended up to its neck in hot water it has yet to climb out of. The litigation over auctions on Yahoo! of Nazi-related items in countries where such items are banned is still moving through the court systems in more than one country.

So some patrolling of the eBay main streets and back alleys is in order. Yet heavy-handed police action is only going to rekindle eBay angst.

Track Record

Competitors are busy circling the eBay camp, of course. Amazon and Yahoo! are not going away, and several online auction houses are doing well in their own niches. However, eBay has world domination on its mind.

Auctions were a starting point, but eBay's efforts to raise Half.com into a strapping e-tailer in its own right is evidence of a larger agenda. eBay is apparently thinking that it can get a piece of nearly everything being sold online in fixed-price or auction form.

And given the eBay track record, only a fool would bet too heavily against the giant.

Loyal to an E

eBay should worry less about the things it now seems so concerned about -- such as whether its auction sellers are linking customers away from eBay and making offline sales , and whether Half.com stalwarts are wandering away and need to be brought back.

Instead, eBay would be well advised to work out a customer loyalty plan. In other words, the Net auctioneer should take some time to figure out how to keep so many different people with so many different viewpoints on the same page while it constantly evolves its focus.

What do you think? Let's talk about it.