EBay's Dominance in Internet Auctions

Abstract

Internet auctions began in 1995 and have been growing rapidly since. As of May 2001, the estimated total revenue of Internet auctions reaches $556 million. Since the beginning of Internet auctions, eBay has maintained a dominant leading position although the popular attention and the profitability of eBay induced entries of two biggest e-commerce firms, Yahoo!, in October 1998, and Amazon.com, in March 1999. An eBay vice president said in January 2000 that eBay’s market share in the Internet auctions market remained at approximately 90% (see Lucking-Reiley, 2000). As of fall 2001, it is believed to be more than 80%. Internet auction sites such as eBay and Yahoo!Auctions acts as listing agents, allowing individual sellers to register their items on their Web sites and running Web-based automatic auctions on their behalf. Actual exchanges including payment and shipment are worked out by the buyer and the seller on their own. The English auctions have been the most dominant format in Internet auctions. However, sellers usually have some control over these Web-based auctions, choosing a set of different parameters for each auction such as the duration days, an opening value, an optional secrete reserve price, and so forth. A variety of goods are auctioned in Internet auctions, but the largest category by far has been the collectibles. Each Internet auctions site has different categories, and there is usually no one top-level category that includes all the types of collectibles. Between September 27, 2001, and November 1, 2001, 59% of listings on eBay belonged to one of the categories such as antiques and art; collectibles; books, movies, music;,coins and stamps; dolls and doll houses; or toys, bean bag plush. During the same time period, 54% of listings of Yahoo!Auctions were included in one of the following categories: antique, art and collectibles; sports cards and memorabilia; toys and games and hobbies; or coins, paper money and stamps.