Amazon vs. eBay: A Shopper's Perspective
By Carol Kopp
NEW YORK (Minyanville) -- Five years ago, Amazon(AMZN) stock was worth about $30 per share. Now it's above $190. Five years ago, eBay(EBAY) shares were a little below $40. Now they trade around $36.
You probably know many of the reasons why Amazon is (again) beloved by investors, while eBay is still stuck in a no-man's-land of investor discontent. There's no shortage of investor analysis and chatter about both companies' strengths and weaknesses.
But there's one key piece of information that seems to have been overlooked, and to me it seems essential. That is: Which one is a better place to shop?
I'm here to help you with that. In my opinion, most analysts, being male, may avoid analyzing the shopping experience as much as they avoid the shopping itself. They get deep into the numbers, but perhaps in the end, they lose sight of the product, and it's the product that counts.
Barring another contender appearing sometime soon, one of these two names is going to dominate Internet shopping for everything, the way that Sears(SHLD) dominated catalog shopping for everything a century ago. Sears brought fashionable hats and frying pans to rural Americans at the beginning of the 20th century. Whether we are on the farm or in the city, we still need those things, but we want them with one-click checkout and a reliable feedback system, too.
Amazon is often called the Wal-Mart(WMT) of the Web, and there are downsides to that. That's why I'm betting on eBay, the underdog. Because it's not Wal-Mart. It's Harrods of London, the Grand Bazaar of Istanbul, and the Brooklyn Flea Market all in one.
Amazon started as a bookstore, and it was and is the biggest and most comprehensive bookstore ever. It built on that brilliantly, piece by piece, until it became a superstore for all media, selling even the device that plays the media and the cloud that stores it. Like Apple(AAPL) , its biggest competitor in the space, once you get sucked into this world you're never getting out.
Meanwhile, eBay began by building the online auction and collectibles market, and it's hard to see anyone ever displacing it there. But along the way, it built a worldwide community of millions of people regularly buying and selling, from established companies to spare-room entrepreneurs to old ladies cleaning out their china cabinets.