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The Perfect Store: Inside Ebay
According to the tale, an atheist
traveled to Rome to check out the Catholic Church,
and saw, through some odd gift of divine grace,
that the Devil himself was sitting at on the
throne of St. Peter and ruling the Church
disguised as a Pope. The atheist
reflected upon the paradox and then became a
devout Roman Catholic. Why? He reasoned that
only the one true faith could succeed with the
Devil himself in charge.
Leaps of faith take many forms, and none were
stranger to the world of the 1990's than the
possibility that people might buy objects they've
never touched from people they've never met and
send money to addresses they've never seen on the
basis of a bunch of colored stars summarizing a
community's collective opinion. Yet that's eBay --
and now anyone curious about the communion of
online buyers and sellers can turn to The
Perfect Store by Adam Cohen. The new history chronicles the purity of the founder's vision, the tumultuousness of exponential growth, the tremors of bliss rippling down the spines of the auction
winners, the purgatory of crashing servers, the
saintly trust of the masses, and the deviltry of
the few. Through all of these trials and tests,
the company prospered with a steadfast devotion to
a libertarian's dream of a frictionless
marketplace where buyers and sellers could engage
in a conversation to discover the one true
price.
The book is sort of a hagiography, although focused
more on the marketplace community than the
corporate leadership. Almost every twist and turn
of the company's history seems to depend upon how
well the people adhere to the vision of a
hierarchy-free community of buyers and sellers.
The company thrives when they make it easy for
goods to find the people who want them.
The book begins where eBay itself began:
in the vision of the founder, Pierre Omidyar. The
book follows him and then the people who join the
company by laying out a largely chronological
collection of important milestones, interrupted
every now and then with a tale of some quirky eBay
member. The author, Adam Cohen, may not speak with the earnest voice of a true believer, but he
is largely happy to describe the decisions with
devotion and reverence. This shouldn't be
surprising because he worked closely with everyone
at eBay and even had his own company ID badge and
work space in the office building. He obviously spoke
often to the core team and the history is filled
with their words.
But the book isn't a dump truck filled with happy
stories. The book manages to include almost all of
the major controversies that I, a casual eBay user
and fan, remember. There's a long discussion about
the decision to ban guns and plenty of talk about
the right way to handle pornography and used
underwear. Cohen also interviewed a number of the
disenchanted members who developed a love/hate
relationship with the marketplace run by one
corporation. They keep talking about quitting or
protesting or going somewhere else when eBay keeps
jacking up the rates, but every time the market dominance
of the company keeps pulling them back in.
The later half of the book is largely filled with
these controversies, in part because there are
only so many ways you can keep repeating details
about the company's phenomenal growth. The viral
explosion of new listings was the story at the
beginning, but after the IPO cemented the success,
the management had to wrestle with the bits of
evil that would drift into the network.
Most of the coverage of these battles is
straight-forward and carried by a flat tone
typical of journalistic distance. The analysis and
criticism are largely left for the reader to
assemble, although the parts aren't hard to find.
For instance, we learn early that Omidyar's
experience in the 1980's with the fat cat-friendly
IPO market inspired him to create a neutral
marketplace where all buyers and sellers were
equals. He apparently tried to buy into an IPO
only to discover that skinny cats didn't get to
buy at the issuing price. Back then, Omidyar was a
skinny cat.
But when it comes time for eBay's IPO, the people
on the company's throne skipped the chance for an
eBay-like OpenIPO. Goldman
Sachs got the opportunity to pick an opening
price for the stock, and the investment bankers
managed to find a number that left a lion's share
for the usual fat cats.
At the time, Omidyar, the other members of the
management team (Jeff Skoll and Meg Whitman) and
Benchmark Capital controlled a stunning 98.1% of
the stock. They quickly became
billionaires. Many of the workers made a few
million of that 1.9% divided among the rest, but
everyone else was left out. The thousands of
people who worked the bulletin boards, and help
create a cohesive community ruled by colored stars
got nothing. This continues to be a bitter point
for many involved with eBay from the beginning.
Money weaves a strange path in and out of the
narrative. On one hand, marketplaces are all about
price discovery. The only reason to list an item
on eBay is to get money. On the other, the book
gives the impression that it's kind of crass to be
into eBay for the money. The eBay folks are
supposed to be passionate believers in this
community ruled by colored stars. It's all about
community, we're told. But I guess if
you can't get IPO shares, that's what you have to
live with.
The book may be best as a sly bit of exploratory
surgery aimed at the strange desires in our body
that drive commerce and trade. Some of the
vignettes of eBay members are priceless and the
stories about the effect of eBay on the market for
collectables are not to be missed. Before eBay,
the members of the Midwest Sad Irons Collectors spent hours at garage
sales and antique stores looking for what many of us might call a rusting hunk of metal. There were even conventions populated by
dealers helping people find what they wanted. All
of the socializing and chatting intertwined in the
weekend swapmeets became history when eBay made
it possible for anyone to get what they want by
plopping down big bids. There's no need to go to
wade through church yards filled with schlock to
find the grail of sad iron collectors, the
swan-on-swan. Someone else is doing it right now... and all you need to do is grep the database. If you're lucky, there's no reserve!
At moments like these, the essential paradox of
eBay becomes clear. On one hand, we're really
after the stuff. We want the Pez dispenser, the
Hair Bear bunch poster or the Elvis jacket. Do you
realize how hard it is to find one just like that?
On the other hand, anyone with a bank account can
buy any collectable now. There are dozens of
every collectable waiting for buyers on eBay.
Purity of heart, steadfast devotion to the goal,
or indefatigable energy won't help you find the
Grail when it's just a matter of typing the right
number into a web form. There's no real scarcity
anymore if you've got the right credit card. Which
brings the question: if the items aren't really scarce, why would we want them?
The real problem is that eBay strips away the
narrative from the objects. Flea markets,
classified ads, and garage sales toss in stories
for free and this is what the dinner guests, the
friends, and the collecting buddies really want.
They want to hear about the clueless, the loopy, the obnoxious, the greedy, the windbags, the ditzes, and all of the other characters buying and selling sad irons.
Adam Cohen's history, The Perfect
Store, is a crisp, clean, and thorough
retelling of what made eBay what it is today. It's
a good story and you can't just buy those. Wait, I
guess you can -- and the publisher is willing to
print as many as the market will bear. Well, there's
another paradox: Maybe, if eBay can survive with
this many strange, wonderful and bitter stories,
it may be the one true thing after all.
Peter Wayner is the author of Translucent Databases , a book commodifying the protection paradox. It describes how to build databases that reveal nothing to the wrong people, but everything to the right people. You can purchase The Perfect Store from bn.com. Slashdot welcomes readers' book reviews -- to submit yours, read the book review guidelines, then hit the submission page.
OK, so now we worship how ebay works, yet scorn amazon for their dotcom business?
Hrm....
Good quote, too many chars. Seriously, the slashdot 120 char limit sucks!
would involve paypal
Amazon has never posted a profit, Ebay generates close to $50MM in distributive (but not distributed) earnings per quarter.
Most "collectibles" go through huge buy-up/sell-off cycles. In the buy-up cycle, everyone sees that everyone else wants the item and therefore decides they need it too. E-bay has, IMHO, greatly accelerated this part of the cycle, for better or for worse, but the cycle has been around forever.
Just look at the E-bay auction terminology: to "win" an auction is to have bid the most. It turns into a game. Which is what the whole auction-to-the-public industry is based around, in fact. The "pros" (as opposed to the public) know that you don't win by paying the most :-)
The eBay I'm familliar with is one with lots of mis-labled/described items that are pawned off as other things. Knock-off items abound. Over priced shipping costs. Paypal/bidpay. Crazed buyers that pay more than retail for used goods. and so forth.
Yes there is also a lot of nice stuff on eBay, it is not a good place for the ill informed(explain to your parents why "they" got ripped off sometime).
As for community? People are in it for the money as others have pointed out. There is less interaction than you would find at your local drugstore. Once a transaction is done, odds are you won't do business with the individual again. A community involves interaction, not one or two transactions.
Granted the whole auction thing is a leap of faith, but it's not all that much stranger than many things we do. Just a different form.
Or maybe you dodn't even have the scraps - I have direct deposit, and then I pay for a lot of junk with my credit card (save on those ATM fees). At direct deposit time, some number called my "checking balance" is increased somewhere, and this other number on this piece of plastic identifies me, and then they subtract the purchase amount from my "credit balance" thingy, and then after a while, I log on to a computer, and send some of the checking balance numbers to my credit balance number.
Not to poke fun at the reviewer, eBay is interesting, it is a leap of faith and it is one of the few working models on the net, and has been making money since it's inception. Just realize there are leaps of faith all around you. the human mind does well with abstraction, large parts of our daily life revolve around that.