Happy birthday eBay

Corporate birthdays are not normally a cause for celebration but it looks as though eBay's 10th anniversary this month may prove an exception.

During its first decade eBay has turned a bit of software that enabled a small number of people to trade goods into a global electronic bazaar on track to make $1bn this year on sales of over $40bn.

It now provides a platform for selling anything from a single postcard to heavy capital equipment or second-hand cars. More than 250,000 virtual shops have been created within eBay's electronic walls, making it, as the Economist noted, an economy in its own right.

Its business model is almost too good to be true because its customers do all the work, including setting up their own sales pitches, doing the payments and evaluating the worth of who they have just done business with; eBay sits in the middle, taking a turn on every transaction that is made.

It is one of a small number of giant Internet-based companies - including Google, Amazon and Yahoo! - that survived the dotcom collapse to become global phenomena.

Two unrelated things are particularly interesting about them. First, they are all American. They didn't have to be. After all, the World Wide Web that made them possible was invented by an Englishman (Sir Tim Berners-Lee) and there were European competitors around in most of the markets they operated in.

The deciding factor may have been the sheer entrepreneurial dynamism of the US coupled with the existence of a risk-capital industry that somehow managed to survive 18 out of 20 start-ups dying.

The second factor is that Internet companies such as these do not seem to attract hostility on the scale that other multinationals often do. It is partly a question of youth and partly because, by cutting out the person in the middle, they have a relationship with their customers (though hardly ever face to face) that is surprisingly warm.

It remains to be seen whether this will survive the pressures of mercenary Wall Street expectations once initial business growth slows down.

Google, less than eight years old, may be in the frontline in this respect since its share price has soared hugely ahead of any realistic expectations of profits growth. Having survived the last dotcom bubble, it has now created one of its own.

But none of this detracts from the originality and quality of the services Google, eBay and the others offer consumers. The danger of them degenerating into monopolies is slight since they are increasingly entering each other's territories. The excitement has only just started.

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