Buy.com & eBay’s Partnership Was A Bad Idea

Posted Jul 14, 2008

eBay Inc. (NASDAQ:EBAY) has been making questionable moves once again.  This time it is in the form of making a deal with Buy.com.  eBay users have been moving to alternatives due to high listing fees and high PayPal fees.  Consumers also seem to prefer fixed prices rather than a constant fluctuation of goods.  This is why eBay made a deal with Buy.com which was a bad idea.

Now Buy.com can sell their millions of books, electronics, and other goods on eBay without having to pay normal listing fees.  The goods that Buy.com lists on eBay will be a fixed price. 

When eBay first started, the company was known for levelling the playing field for mom-and-pop shops versus bigger companies that sell similar goods.  The deal with Buy.com indicates that eBay has more interest in big businesses.

?Frankly, we are challenging some of the core assumptions that we have made about our business,? stated Stephanie Tilenius, GM of eBay North America. ?Instead of focusing on being an auction business, we are looking at what it takes to create the best marketplace out there.?

Buy.com started in 1997, had an IPO within 2 years, almost died out with the dot-com bust, and then took themselves private.

If eBay continues to make deals that stirs away from their core strength in online auctioning, they may find themselves in a similar position as Yahoo!  A major shareholder may protest a shift in the company’s board and try to get the company to sell themselves off.

Related Link:
NYT