Ebay’s decline

You should also check out their stock price, it has reflected this decline for several years:

http://finance.google.com/finance?q=ebay

Embeddable widget here:

http://www.wikinvest.com/stock/EBay_(EBAY)

Ebay appear to have maxed out their marketplace for now. But still it is a healthy little earner - a real business which will last. Surely more interesting and exciting though is Paypal, there is still tonnes of room for growth (they are in a much stronger position than Visa or MasterCard to win in mobile payments) and ultimately the potential is there to match and compete with Visa and MasterCard.

Nic, I think this is also an indication that the Internet auction using community is migrating to niche market sites, such as ours. We auction rare books via the Internet and have seen our growth steadily increase, on a consistent basis. Other factors like costs come into the equation, we charge our sellers a mere 5% commission and $1 per book listed, plus there is no buyer's premium (Ebay's charges are substantially higher). I believe that the future lies in these types of highly specialised community based websites - typical "long tail curve" business model.

Interesting point James. I think we are seeing a similar trend with social networks too. It could be that on the web the economies of scale aren't strong enough to justify the product compromises necessary on these one size fits all sites.