The eBay Phenomenon

In another piece from the NYT, we see some handwringing by eBay sellers over lower margins. But eBay remains the best idea to emerge from the Internet boom. For a fun read about how eBay became a phenomenon, take a look at The Perfect Store: Inside eBay, by Adam Cohen. While the author has been criticized for becoming to attached to his subject, this lapse is understandable. EBay is simply hard to resist. I teach a case study on eBay's venture capital contracts, and the students always laugh when they learn that eBay took the VC money and put it in the bank. By the time the VCs joined the party, eBay was already turning a profit, and it has never looked back. (By the way, eBay was the investment that made Benchmark Capital. For an interesting look inside a venture capital firm, see eBoys: The First Inside Account of Venture Capitalists at Work, by Randall Stross, which describes a year in the life of Benchmark.)