Amazon Or Ebay?

Who is better, Amazon.com, Inc. or eBay Inc? That is a question I hope to offer insight on by touching base on the general aspects of each company, their business strategy and financial status. In the end, I'll share with you my preference of company. The one that I feel would use my investments wisely.

General Company Information:

Amazon.com, Inc. (AZMN): Amazon.com, Inc. has been operational on the World Wide Web since July 1995. Today it is listed as a Fortune 500 company and operates several web sites in North America and Internationally. They "seek to be earth's most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavor to offer customers the lowest prices possible." Amazon.com is continuously making changes; new to 2005 is a shipping membership program, Amazon Prime. In this program members pay a yearly fee of $79 and they receive free two-day shipping and discounted overnight shipping. They hope to entice a more loyal and frequent shoppers.

eBay Inc, (eBay): eBay was created in 1995 in Southern California. It is considered as one of today's greatest online auction marketplaces. "We (eBay) currently have two major businesses: the eBay Marketplace and PayPal. Our eBay Marketplace mission is to create the world's online marketplace. Our PayPal Mission is to create the new global standard for online payments." eBay is constantly improving their market position in both North American and Internationally.

Business Strategy:

AMZN: "Our business strategy is to relentlessly focus on customer experience by offering our customers low prices, convenience, and a wide selection of merchandise." Their strategy to achieve this is to improve operating efficiencies, continue to work with third party sellers and improve the functionality of the web site. Amazon.com also offers discounts in many forms. One of the most favorable discounts is the free shipping offer, this seems to attract buyers to the site. Word of mouth is a strongly used marketing strategy. Amazon.com feels this is a very important way to attract new buyers. One of my favorite features of Amazon.com is the Wish List. This is a place were one can list all items they 'wish' to own. It is very convenient if you have people to buy for people out of state, you can easily buy online and they ship for you.

eBay: " We (eBay) intend to achieve our mission of creating the world's online marketplace by improving and expanding across three main areas: categories, formats, and geographies." To date eBay has over 40 categories, antiques, collectibles and music to name a few, in which customers can sell or buy items. eBay.com is currently expanding their services to classified-style trading and online housing and apartment rental market. The biggest business draws is the antiques and collectibles you can find on their sites. If you are looking for that one special thing, chances are eBay.com has it. Every year eBay.com is expanding it brand across the world. 2005 is a year of investing in China and PayPal. They hope to make PayPal.com "the online payment standard around the world."

Financial Status:

AMZN: Over the last five years Amazon.com has successfully improved their financial situations. Going from ($4.02) per share in 2000 to $1.45 in 2004. They were able to repay more than $600 million dollars of convertible debt last year. Amazon.com's long-terms financial focus is growth in free cash flow. Another strong note is the fact that the Euro is stronger than the dollar so the International