![]() Yahoo! Japan started its auction site in September 1999, and quickly gained critical mass – soon amounting to 95% market share. In fact, a very interesting example of a situation in which eBay failed because it missed out on that important first mover advantage is the case of eBay Japan. Pathways to a Just Digital Future Watch this tech inequality series featuring scholars, practitioners, & activists ![]() Interestingly, “some critics believed that the Auction Universe interface was more intuitive than eBay’s and included a better search engine however, the site failed to displace the advantage eBay obtained from the lock-in effect it had on a large number of auction bidders and sellers.” Have you ever heard of Auction Universe (founded in 1997), or BidBay (founded in 1999)? Probably not, and with good reason – none of these early eBay ‘competitors’ exist anymore today. While players such as Amazon and Yahoo! failed in their attempts to unseat eBay’s dominance in online auctions and gave up about a decade after eBay’s founding, we can look even further back to the time of eBay’s founding, for other telling examples. “eBay’s first-mover advantage played a tremendous role in the company’s early success.” First mover advantage and the “lock-in” effect.In establishing the site with the most sellers, and therefore, the widest product offering, eBay could then attract the most buyers, which in turn, attracted more sellers, and so on.ĮBay’s early success in the US – lessons on how to succeed in a space where network effects matter ![]() Network effects – and in particular, indirect network effects – played a crucial role in eBay establishing itself as the dominant player in the new world of online auctions in the late 1990’s. ![]()
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