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 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, 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?


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