eBay is the next AOL

Do you remember when it seemed like everyone was on AOL?  Do you remember when people were basically addicted to AOL chat rooms and was paying hundreds of dollars a month because AOL was charging subscribers by the minute?    Look where they are now.  I think eBay is going to end up the same way AOL is.  eBay is enjoying their monopoly position by basically gouging their sellers with exorbitant fees just like AOL once did.  That will become their own undoing as time goes on.

I believe eBay will become completely irrelevant in the business they are in.  However this isn’t going to happen overnight.  It will be a slow and painful death that will take a decade.  They tried to diversify their business by buying Skype and StumbleUpon but those didn’t go anywhere.  Coincidentally AOL did the same by making bunch of acquisitions that didn’t go anywhere.  Remember Netscape?  How about MapQuest?  Does anyone use them anymore?  eBay is like a rich blind man chucking large bundles of cash aimless hoping something will stick.  As they become more desperate to prop up their existing business they will be even more aggressive at acquisitions.  AOL did the same thing in the past.  Remember the Time Warner acquisition fiasco?  I believe eBay will repeat the same mistake AOL did.

I can even make a generalization that any company with the combination of deep pockets and dysfunctional management can fall into the same trap.  They are so big yet they still have to meet the expectations of wall street’s quarterly growth rate for their stock price to go anywhere.  The share holders also put pressure on the company to get the stock moving upwards.  If their core business has flattened out the only way to do is through acquisitions.  Look at Microsoft for example.  Their stock hasn’t gone anywhere for years so they are desperate to do something.  That’s how you end up with software company trying really hard to get into an online advertisement business even though their core Windows product is in trouble at the moment.

eBay’s long term future looks quite bleak right now.  Eventually eBay will become a has been just like AOL.  I do believe that company or companies that will take place of eBay is just beginning to emerge.  They are so small they are completely under the radar but they are there.  Mark my word.