Monday, March 06, 2006

Trade yourself

Today, Fairfax bought the New Zealand internet auction site, Trade Me, for A$625 million. That is about $150 per New Zealander! This seemed to me a staggering sum for a site that competes directly with eBay.

I hadn't heard of Trade Me before but I visited www.trademe.co.nz today to see what the fuss was about. I did a search (as I am want to do) for "lego star wars" and found 60 plus entries. If I went to www.ebay.co.nz, there are none. So there is such a thing as network effects when it comes to Internet auctions.

Actually, the NZ eBay site is interesting for it uses a yellow motif and cartoon kiwis that give it a look and a feel similar to Trade Me but very different from other eBay sites around the world. The question I have is this: why didn't eBay want to pay as much as Fairfax for Trade Me?

2 comments:

P.A. Coplay said...

My experience with trade me is the same. After visiting it on the recommendation of a NZ colleague, found almost no cement related material (unlike ebay which has over 100 items in books alone at any one time internationally). Network externalities are very important here. It seems a very dubious decision on the part of fairfax.

Anonymous said...

Cement-related material? Sounds really exciting for a consumer-related website! hehe