Information Wants to Be Free on eBay, too

Well, at least in China.  FT recently reported that "eBay has stopped charging transaction fees to its sellers in China, and is now only charging listing fees".  Both Nick Carr and FT agree that this is because eBay could not stand up to the pressure by AliBaba’s TaoBao.

Here’s the problem I see:  To me, marketplaces should be natural monopolies.  The barriers in front of a massive, single marketplace are anti-trust regulations, search inefficiencies, and brands (which, in fact is a result of search inefficiencies).  And these are each significant barriers so we should not be worried that tomorrow, we will only have eBay through which we can peddle our goods.

However, as long as marketplaces don’t turn into monopolies, there will be room for fierce competition, as we see from the China example, which will force the prices down.  And, as a result, information (and content, since I have been focused on Media lately), once again will push towards being freely available.

Going back to the barriers mentioned above, the only one that’s not artificial is search inefficiencies.  Does this tell us that search holds the key to marketplaces and commerce in the future?  I think Google is telling us it thinks so, with Google Base.

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