It's unbelievably hard to unseat them. I knew the Yahoo Auctions team well back in 1998-2001, and they had a better product for free. Sellers and buyers preferr

It's unbelievably hard to unseat them. I knew the Yahoo Auctions team well back in 1998-2001, and they had a better product for free. Sellers and buyers preferred it. But there weren't many buyers because the sellers weren't there, and there weren't many sellers because the buyers weren't there. So even with Yahoo's network and brand they didn't win. (They did win big in Japan where eBay was slow to localize.) Auctions have worse lock-in than you'd expect. You might think, if there's a marketplace with X buyers and another with X/10 buyers, most sellers would make the effort to list in the X/10 marketplace because they can increase their sales 10%. But with auctions, the sales price is a strong function of excess demand. Those extra 10% sales would be at significantly lower prices, and eBay merchandise tends to have low margins. When sellers lost money they quickly left.