EBay Falls because Google May Add Online Auctions

[apcmiller]

Oct. 25 (Bloomberg) -- Shares of EBay Inc., the world's largest Internet auctioneer, fell as much as 5.6 percent on concern Google Inc. may soon introduce a new feature that allows users to sell products online.

Bear Stearns Cos. analyst Robert Peck said today in a note that Google has been testing a Web site that looked like an on online marketplace, similar to that of San Jose, California-based EBay. Peck cited screen shots of a product called Google Base that were posted on a Web log.

``Should this proposed product be utilized as speculated, we would think that it is a large incremental positive for Google and a large incremental negative for EBay,'' Peck wrote today. He said he had been unable to confirm the plans with the company.

The move signals Google's intention to expand further beyond Web search. Adding online auctions or sales would enable Mountain View, California-based Google to tap its base of 400 million monthly users, posing a threat to EBay. Chief Executive Officer Eric Schmidt said in June that Google is developing a payment service. That may rival EBay's PayPal payment product.

Google spokespeople Steve Langdon and Lynn Fox didn't immediately return calls seeking comment. EBay doesn't comment on rumors or speculation, spokesman Hani Durzy said in an e-mail.

EBay shares fell $1.85 to $37.57 at 12:57 p.m. in Nasdaq Stock Market composite trading. They fell 32 percent this year before today. Google shares fell $3.53 to $345.12, after rising 81 percent this year before today.

Peck cut his recommendation on Ebay shares to ``peerperform'' from ``outperform'' in September. At the time he discussed the possibility of Google starting a rival product.

Peck wasn't available for an interview, Bear spokeswoman Monica Orbe said.

Classified Ads?

Google may use Google Base as a classified ads site, UBS AG analyst Benjamin Schachter said in a report. That would compete with EBay and sites such as Craigslist.com, he said.

The screen shots showed a page that enabled users to input details of a product for sale. ``Google Base is Googles' database into which you can add all types of content. We'll host your content and make it searchable for free,'' the site says, according to the screen shots cited by Peck and Schachter.

Google's users rose 38 percent in August, according to Reston, Virginia-based ComScore Networks Inc.

EBay said Oct. 19 that listings rose 32 percent in the third quarter to 458.6 million and registered users rose 35 percent to 168.1 million. PayPal had 86.6 million total accounts at the end of the period, 53 percent more than a year ago.

Bloomberg

[boulder omen]

good lord, Google will crush eBay so fast, well maybe not right away but give it a year.

[Guest oxygenuk]

awesome

i hope that evil ebay dies!

[eBait]

Me 2 ^^ ASAP

[Guest Globalist]

Your looking at it in black and white terms.

Google have the market for 'search', and even though MSN and Yahoo are capable of doing the same job, it's Google who keeps at the top of the search economy, by doing what it's good at. People will stick with Goole for that reason.

It's the same with EBay. EBay have created the market of online selling and buying which has the same future as Goolge has, of being the key player of searching the internet. Hense, people are sticking to Google for what it did offer, what it offers now, and indeed what it will offer in the future of search.

So as for EBay's future of being the key player of online auctioning, it seems to be rather colourful. As indeed for Google's future, absolutely.