Jazz by the eBay

AT a briefing on the nature of capitalism some years ago, philosopher Michael Novak of the American Enterprise Institute pointed out the rea...

AT a briefing on the nature of capitalism some years ago, philosopher Michael Novak of the American Enterprise Institute pointed out the real 8216;8216;Reagan revolution8217;8217; was about small businesses. 8216;8216;At one stage in the Reagan presidency,8217;8217; he said, 8216;8216;four or five small companies were being set up every minute.

It was an instructive lesson for mindsets that perennially associated capitalism with big business. In a sense then the whole eBay phenomenon sweeping America 8212; and at least some of its 32 other national markets 8212; is a sort of Reagan revolution online. If you use eBay, you are probably your own company.

Two weeks ago, eBay Live! 8212; the company8217;s 10th anniversary party to itself in its San Jose hometown 8212; was an indicator of how far a fad had gone. eBay famously began as a collectibles auction and exchange site in San Jose/the Bay Area, packed with techies with kinda8217; oddball tastes.

At its birthday party in late June, it welcomed eBay users from all 50 American states, part of a community of 147 million 72 million in the US, the rest overseas that will buy and sell goods worth 40 billion this year. Just over 25 per cent of that will be transactions involving used cars, making eBay one of the world8217;s largest second-hand automobile malls.

Yet eBay8217;s success cannot really be measured in terms of billion dollar revenues. It is middle America8217;s new baby: the channel that brings the global market to Smallsville.

An antique dealer or an old books store in a small town can now sell to a buyer halfway across the country 8212; theoretically, the world 8212; without going through intermediaries. It makes eBay8217;s business sound thrilling; it also makes it seem very scary.

Consider this: eBay makes nothing, writes no great software code, creates no dazzling content for a vertical portal. It makes money because 147 million decide to 8216;8216;meet8217;8217; and do business on its website. If they leave, if they move to another auction/online sales site, eBay dies. It8217;s that simple.

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No wonder the eBay community is not just crucial to eBay, it is eBay. Not surprisingly, in San Jose, Meg Whitman, CEO of the company, spoke of the celebration being a 8216;8216;family reunion8217;8217;. 8216;8216;The community,8217;8217; says Rajiv Dutta, eBay8217;s chief financial officer and the company8217;s top-ranking employee of Indian origin, 8216;8216;occupies all of our thinking.8217;8217;

Eight years at eBay have taught Dutta a few things about mini corp: 8216;8216;We have to be the most efficient platform. Small businesses are not looking to minimise costs, they are looking to maximise cash flow.8217;8217;

The Internet is a strange beast. It8217;s most popular application 8212; e-mail 8212; killed the old-fashioned post office. Yet the United States Postal Service was a principal sponsor of eBay Live! and the US postmaster general guest of honour at the opening gala.

Now dowdy bureaucrats don8217;t usually mix with Net fiends whose idea of high fashion is sneakers and a three-day stubble. Yet eBay is a principal source of business for the reinvented US Postal Service. It delivers packages between eBay8217;s sellers and buyers and makes much money out of it. Like God, what the Internet taketh away with one hand, it giveth with the other.

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AVNISH Bajaj, chief of eBay India http://www.ebay.in says the Indian postal authorities have also been in talks with his company for a similar arrangement. 8216;8216;They8217;re waiting,8217;8217; he says, 8216;8216;to get their online package tracking system in order.8217;8217; For eBay, too, India 8212; with China 8212; is the market to watch out for, the new thrust area.

On paper, eBay has geographical spread in India, if not business depth. It has registered buyers and sellers in 240 towns and cities, from Tirupur to, well, Tripura. A piece of jewellery sells every five minutes on ebay.in, a watch every four.

So far it seems to be the favourite of specialised small town sellers 8212; diamond merchants in Surat are a good example 8212; and discerning small town buyers 8212; the sort who may want a greater choice of cell phones than is available locally. It also has its quota of heartwarming stories, such as of the hearing impaired stamp collector in Thiruvananthapuram, the sort of empowering case study that has become an eBay signature.

Yet India represents a peculiar challenge. In the US and developed markets, eBay has emerged as an alternative to big retail. It is, however, arriving in an India that is just waking up to big retail. Dutta acknowledges the contradiction: 8216;8216;Take an analogy. Growth in land lines in India coincided with cell phones coming in 8230; And don8217;t forget, even in the US 95 per cent of commerce is offline.8217;8217;

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IN the end, eBay is exciting not because it pays dividends but because it exemplifies the best of the Internet 8212; it enables the individual. In eliminating the middleman and the business agent, and allowing a person to buy or sell what he wants to most, it marries counter-culture to the boardroom. It becomes the counter-corporation.

Perhaps eBay8217;s media equivalent is the blog, the self-generated, self-published journal/newspaper/pamphlet that, if you trawl the blogosphere, told you more about what America was thinking in its election year 2004 than did mainstream papers. Just so much of sharp debate and trenchant opinion is now found on blogs that they are becoming the single-biggest threat to the page you are reading.

Hmm 8230; Wonder if eBay has a category for buying and selling blogs.

The author travelled to San Jose on the invitation of eBay