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Should Amazon buy eBay?

With Amazon.com (NASDAQ: AMZN) plodding along in much of the same business as eBay (NASDAQ: EBAY) these days, one has to wonder if Amazon can ever steal the "used goods" auction crown from the online auction leader. But then again, eBay is seen as an auction house but is just as much a new product retailer (in some ways) as Amazon. Do you think the companies are direct competitors? By many measurements, they are.

But in 2006, Sheldon and I wrote several blistering pieces on eBay here in the pages of BloggingStocks which prompted a large display of vitriol and disgusted hatred of eBay. After reading some of these comments, it was amazing eBay was still doing good business. Clearly, there are thousands (if not millions) of eBay sellers that are completely disgusted with the auction leader. And that was last year.

Is eBay down for the count? Of course not, since it continues to be a hub for online auctions even with Amazon.com as a main competitor. It's Skype purchase didn't exactly work out as planned, and eBay CEO Meg Whitman is seeing harsh criticism from that decision now. Still, if Amazon.com were to try and purchase even a controlling stake in the online auction house, the sheer amount of fraud, displeased (and defected) sellers and all the other nonsense would have to be addressed.

According to many, eBay's execs sure may not be addressing the problems. Could eBay be eclipsed in the near future by a company that governs the seller-buyer transaction better? Perhaps. But eBay is just like any flea market: full of goods at excellent prices but also filled with fraud, dishonest sellers, cheaply-made commodity junk and a reputation to go with all that. I'm quite sure Whitman would like to shave the latter away forever. Or, let another company try and save it from itself -- although Amazon.com may not ever be interested.

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Last updated: July 24, 2008: 10:03 AM

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