Bronte Media

To date, the slowdown of eBay’s core business and now the holiday disintegration has largely been framed as a discussion around eBay vs Google AdWords or more recently eBay vs pimply startups who are licking their lips at the demise but have no progress beyond their ambitions as yet.

But each of those discussions are entirely missing the point: The real game for small retail merchants is between eBay and Amazon. The lightbulb really went off in my head when I moved to Paris and sold all my miscellaneous crap. For the books, I listed them on Amazon and was blown away by the simple experience. Now it seems that folks are not only listing books and that the second hand/third party goods sold on Amazon are starting to rise.

And as a little salt in the wounds of a budding competition, Amazon decided to drop eBay’s Bill Me Later option from the site. Amazon accounted for roughly 10-15% of the activity on the service. Although I am more inclined to agree with Arrington in that Bill Me Later is probably getting hit hard by credit default rates just like any other provider of debt and probably has to raise its fees/interest rates.

In any case, I expect the migration of eBay seller activity to Amazon to provide a major growth driver for the company (much more than cloud computing). The only trouble: Amazon’s investors already agree and have priced in such a trend with many others at its current valuation.