Why Isn't 'Used' The 'New' New?

eBay is the uber-auction site that should be connecting today's penny-punching consumers, only its traffic is down significantly. What's wrong?You'd think our troubled times would be a Golden Age for eBay's business. Economic downturns encourage folks to spend less, just as they try to find ways to make more. Pawnshops, classified ads, garage sales, swap meets, and flea markets are the analog versions of eBay's digitized capabilities. The service should be booming.

Only it's not. Visits and views are down 20% or more over the past two years. What's wrong?

I suspect that the eBay brand aspires to be something more than a auction platform, so it has spent far more time investing in technology, and much less on the relationships and tactics that would have built the volume and quality of its buyer/seller transactions.

It has its own VoIP tool (Skype), its own payment processing service (PayPal), and even runs other retailing sites. It pulled back on its affiliate stream and online ad spend, and has built positions for established retailers (or aspiring ones), as if to set itself up to do something other than auctions...but what?

eBay believes it's competing with Amazon, Zappos, Wal-Mart, or any of thousands of specialized online retailers. And it has aggregated the technologies to do it...to the tune of billions of dollars in expenses. And many hours of distraction.

I wonder why it didn't set out to do something different with all that great technology and ingenuity: accomplish things like build true communities; earn real user loyalty; offer a networked universe of value-add services; even pioneer community-driven decision-making and growth.

In other words, eBay could have become the hands-down best place to buy and sell used stuff. Period. In this downturn of ours, it could have owned the idea that "used" is the "new" new for consumers shocked by the prices on the retail sites.

Instead, it's competing with them. And it's losing.

Jonathan Salem Baskin writes the Dim Bulb blog, and is the author of Branding Only Works On Cattle.