In addition, the Internet auction market is scalable, meaning that it doesn't cost much more to add significant numbers of customers. Additional revenue from these users drops almost entirely to the bottom line. Certainly, competition can't be ignored in this market. Because of its leadership in the auction market, however, eBay has a definite lead. Such a lead is imperative because the most active communities will offer the most effective and efficient auctions.
More buyers attract more sellers, which in turn brings in more buyers and so on.
Being the first mover in this market has given eBay a significant competitive advantage. Long-term investors, however, need to stop and determine whether most of the upside has already been priced into the stock. Just looking at the Internet auction market is not sufficient, though. When, what, and where these acquisitions are anybody's guess. Unfortunately, I don't know of anyway to predict what kind of companies these acquisitions will create.