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eBay (Nasdaq: EBAY)

With the recent downtrend (and now uptrend) in the stock I think this would be a good time to buy. Google coming up with a competing service was one of the main reasons for the downturn. However, the death of eBay was greatly exaggerated.

This is why I like eBay:
 I really like the acquisition of Skype which is adding subscribers like crazy. The reason we like the acquisition of Skype is because of Wimax. There are a lot of cities moving towards citywide Wifi/Wimax which will enable internet access throughout a city. Wimax will also be able to provide internet access in rural areas that currently don’t have cable or DSL connections available. I am eventually leading to the idea that cellular providers like Sprint/Nextel, Verizon and Cingular will have competition from VOIP providers like Skype. If there is a Wifi or Wimax connection throughout a city than you can just use your VOIP phone and call practically for free. I think this is where VOIP providers such as Skype will benefit the most. I know people who use who have Skype on the PDA and use it in WiFi zones to call for free or SkypeOut. EBay also has plans to connect buyers and sellers through Skype. I think this would be another growth area for Ebay in the big ticket items which will lead to higher commissions from sellers.   

Paypal is also moving to micro payments which will also help Skype. Sooner or later micro payments are going to be taking off for buying newspaper and magazine articles among other things. Paypal can dominate this area as well and although the commission won’t be as high, the volume could be enormous. I am still not totally sure how Shopping.com will play into the picture but Ebay-Paypal-Skype combination is going to be huge down the road. I would load up the stock on any downtrend and keep for the long term.

Key long term trends with EBAY:

· SKYPE—It’s already growing at a tremendous rate. However, with the WIMAX about a year or two away from going mainstream, we don’t see a tremendous upside until then. However, the revenues will keep increasing at a tremendous rate and rocket once WIMAX and broadband surges. 

· eBay Marketplace Research—Will add to revenues in the near term.

· 4th Quarter—Should be very strong and all the early reports point to that. They have also increasing there marketing campaign and online shopping is also predicted to surge this shopping season.

· International—Should continue to grow at tremendous rate.

· Craigslist—Management did a great job buying a stake in this tremendous website.

· Paypal—Paypal, one day in the future will surpass eBay in revenues.