I think I have mentioned before on my blog that eBay dominates the online auction market in the US, but Yahoo! Auctions dominates the market in Japan. The same can be said of other countries and online services. Why is this?

The reason why is because of critical mass. Once a social website reaches critical mass there is no reason to visit another site. If you can find what you are looking for on eBay, why even bother going to Yahoo Auctions?

Right now there are quite a few social sites out there trying to be the next Myspace. I can’t call them Myspace clones, because Myspace hardly was an original idea. What Myspace did differently is that it brought in users and reached a critical mass. Why should someone sign up for another social networking site if all of their friends are on Myspace?

Myspace certainly is different from eBay. Since Myspace is a social site there are many differents dynamics in play. For example, there is a stigma toward Myspace for people over 30. This market may be much more inclined to sign up to a business social networking site. With auctions it doesn’t matter who is selling your product, just that they have a reputation and a good price.

So what does a site that wants Myspace’s audience have to do to get it? They can’t just add new features (even if they are in AJAX) or pay $1.25 for every new member through an affiliate program. That company has to do something radically different and better in a way that can build momentum and pull the users from Myspace. Will another company be able to pull this off anytime soon? News Corp. is definately hoping they won’t.

By the way, has anyone ever considered that Google might attempt to knock eBay off in the near future? With their move into mobile, the still elusive Google Base, and rumours of a Paypal clone it seems plausible.