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Growing Pains for eBay


eBay, one of the biggest success stories of the dot.com era, is turning 11 years old. Economic experts say that's about middle age for many Internet start-ups. As VOA's Mil Arcega reports, some say the world's largest online commerce company is starting to show its age.

eBay's success is a testament to the economic power of the Internet. With more than 200 million members worldwide, eBay conventions can seem more like church revivals than business meetings.

The enthusiasm comes from converts such as Diane Bingham, who says eBay changed her life. Bingham, a recovering alcoholic, started her antique business eight years ago with $20 and an old computer. "Our first year we made $30,000, which was a fortune for us. Then, we made four million last year and we're projected to do six million this year."

Bingham now employs 60 people at her warehouse in Utah, which serves thousands of buyers and suppliers overseas. She said, "I'm a coal miner's daughter from Price, Utah, and if I can do it, anyone can."

It's the kind of rags-to-riches story eBay likes to tell, but after only 11 years, the company, which has enjoyed its largest growth overseas, may be showing signs of age.

Brian Cooley is an editor at CNET.com, a computing and technology news service. "They've hit a plateau for sure in the United States and perhaps in the German market, which is also very important for them,” Cooley said, “Their growth in Asia, however, is not as assured as it was in these early markets that they once dominated."

That's particularly true in China, where there are more than 100 million Internet users. Voice of America senior economics correspondent Jim Randle says eBay is losing some of its edge to younger companies, which in some cases offer the same services for free. "In China, their toughest competitor is Taobao.com, which has about double the market share that eBay does."

Stock for eBay is down about 15 percent this year -- in part because of the company's $2.5 billion purchase of Internet telephone company Skype. eBay chief executive officer Meg Whitman says the purchase will strengthen eBay's global presence by allowing users to communicate with buyers and sellers around the world. She said, "The combination of eBay, Paypal and Skype is more powerful than the sum of its parts."

Despite the growing competition, eBay remains an imposing force in the world of e-commerce. Estimates suggest eBay will generate more than $50 billion in business by the end of this year.

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