Ebay: the counterfeit capital of the world
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Price: $107.90 +0.06%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.3%
EPS Growth %: +3.7%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.3%
EPS Growth %: +3.7%
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From 247WallSt
Imagine this. Some large brand companies believe that 99% of the items sold under their names on Ebay (NASDAQ: EBAY) are counterfeit. Louis Vuitton and Christian Dior are suing the online auction company to try to get fake versions of their products off Ebay's site.
According to the FT; "One designer clothing and accessories brand said it had seen the number of fakes using its brand name on Ebay rise dramatically in the past year, from 16,400 in 2005 to 20,827 in 2006."
It puts Ebay in a bit of a bind. It can try to police fakes on its websites but with hundreds of thousands if not millions of counterfeits that would be almost impossible. It could take some of the offenders to court and make examples of them.
But Ebay makes money on the knock-offs so it is a bit hard to say how diligently they are willing to work to harm their own business. Whether it is their legal responsibility to check all the credentials of every seller is an open question.
What is not an open question is why the US government is spending its time complaining to China about pirated and counterfeit items sold in the big Asian country when it could just go over the Ebay headquarters and watch the world's best fakes being sold on any PC in the universe.
Douglas A. McIntyre
For more market insight go to http://www.247wallst.com/
Imagine this. Some large brand companies believe that 99% of the items sold under their names on Ebay (NASDAQ: EBAY) are counterfeit. Louis Vuitton and Christian Dior are suing the online auction company to try to get fake versions of their products off Ebay's site.
According to the FT; "One designer clothing and accessories brand said it had seen the number of fakes using its brand name on Ebay rise dramatically in the past year, from 16,400 in 2005 to 20,827 in 2006."
It puts Ebay in a bit of a bind. It can try to police fakes on its websites but with hundreds of thousands if not millions of counterfeits that would be almost impossible. It could take some of the offenders to court and make examples of them.
But Ebay makes money on the knock-offs so it is a bit hard to say how diligently they are willing to work to harm their own business. Whether it is their legal responsibility to check all the credentials of every seller is an open question.
What is not an open question is why the US government is spending its time complaining to China about pirated and counterfeit items sold in the big Asian country when it could just go over the Ebay headquarters and watch the world's best fakes being sold on any PC in the universe.
Douglas A. McIntyre
For more market insight go to http://www.247wallst.com/
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