eBay's Home-Cooked Rivals

A month after some of eBay's(EBAY Quote) largest customers created an uproar over the company's decision to raise its listing and other fees, the dust is settling and the fallout is a little clearer.

The upshot: Talk of a mass exodus is proving hollow, as is a threatened boycott among sellers. eBay has made small steps at alleviating some of the pain from higher fees. Competitors will see a sliver of listings move from eBay to their sites. But angry sellers have hardly delivered a body blow to the e-commerce giant.

That's the good news. The bad news is that the episode exposes, or even enhances, the long-term threat that eBay faces from other sites -- particularly sites set up by eBay's own customers to compete with it. In some cases, eBay is proving an incubator for small businesses to set up shop online. Mom-and-pop shops may be getting squashed by the likes of Wal-Mart(WMT Quote) on Main Street, but they are being nurtured by eBay on the Net.

It's unlikely that many of eBay's "PowerSellers" -- members of a voluntary program eBay offers to its high-volume customers -- will leave the site completely or substantially curtail listings. But they are moving from a world in which they sold exclusively through eBay to one in which they have multiple channels -- Amazon.com's(AMZN Quote) zShops, Overstock.com(OSTK Quote) and their own Web sites for loyal shoppers. ...