Foreword: This Magic Marketplace

Foreword: This Magic Marketplace

As you will read in this book, eBay is a community, a platform, a social experiment, a successful business, and a microcosm of important Information Age precepts like "network effects," "positive returns to scale," "frictionless economics," even "the changing nature of intellectual property." eBay has a couple of dozen knockout doctoral dissertations lurking in its depths, as well as any number of statutory reforms, sermons, and life-lessons. If you haven't played with eBay yet, you should. If you have played with eBay, this book will enrich your play further.

eBay is becoming the most important way for people to exchange goods. Exchanging goods, exchanging information, and exchanging culture are the three most important activities undertaken by human beings, with the exception of exchanging fluids (without this last exchange, the human race would die off in a generation).

eBay is a uniquely Information Age technology, and as such, it is properly ranked with other technologies that have democratized participation in the fundamental activities of our existence, like the Web itself and Napster.

When the Web was beginning, a lot of Solemn Information Clergy muttered darkly about the inevitable failure of the Internet as a "library" or an "encyclopedia." Libraries are grown-up affairs, filled with serious books written by serious people and carefully cataloged by guardians of human knowledge into hierarchies that express the depth and breadth of all endeavors. The Web has no quality-control mechanism. Any nutbar can pen a few thousand words of lavishly illustrated tinfoil-beanie woo-woo conspiracy theory and post it online, without permission or proofreading. No one seriously attempts to catalog or organize the whole Web into hierarchies anymore?Yahoo! was the last company to make a go at it, and they've quietly deemphasized their effort ever since they realized that keeping pace with the explosive growth of woo-woo tinfoil-beanie conspiracy theories would necessitate hiring every single human being alive and setting them to work cataloging for 14 hours per day.

The best lesson of the Internet is that Napster is better than record labels. Record labels are huge, lumbering, pre-Information Age dinosaurs, thrashing around in the tar as they sink beneath the weight of history while meteors detonate spectacularly overhead. They're incredibly inefficient. They require extraordinary?even unconstitutional!?legal protection to coexist with the Internet. What's more, they've spent a lot of time and money trying to figure out what their customers want from online music distribution, and have utterly missed the fact that hundreds of millions of music-buyers around the world have taken up avid use of file-sharing networks that give them all the music they care to listen to, at a cost that's bundled in with their communications services, day or night, with no "copy-protection" or "rights-management." They've missed the fact that no customer of theirs ever woke up in the morning and said, "Dammit, I wish there was a way I could have less music, and do less with the music I have."

And yet, the Web *is* displacing a lot of the traditional roles played by libraries, despite its typos and madmen. Napster and its progeny *are* becoming the world's preferred means of locating and sharing information, shouting defiance at extraordinarily wicked lawsuits and extraordinarily stupid Acts of Congress. The Priesthood of Information and the Guardians of Music have been displaced by dirty-faced kids whose technology is allowing them to take control of their own information and cultural transactions, and the world is a better place for it.

eBay is a marketplace, and marketplaces are the cradle of civilization. The congress of the market is where all economic theory begins. The Bazaar of the Market is noisome and varied and sticky. Goods sell for one price at one moment, and another price the next. Our modern descendants of the market have had their own priesthoods, like the hyperkinetic hyperacidic floor-traders at the old NYSE who shouted commodities prices out for eight hours a day, running on a lean blend of caffeine and adrenaline.

Buying and selling goods, improving goods, building a business, adding and subtracting value: these entrepreneurial qualities have achieved mythic status in our world. The epitome of these activities is the five-cent lemonade stand: by combining commodity ingredients?sugar, lemon juice, and tap-water?a child can pocket a 400 percent profit on one cent's worth of goods.

Unfortunately, most of us leave the market after our childhoods, revisiting it only long enough to haggle over the price of a car, buy a new house, or throw a yard sale on a summer morning. We forget what it means to be part of that negotiation, that process by which goods and buyers and sellers dance frenziedly about one another, seeking a moment of stability in which a perfect equilateral triangle is formed.

No, most of our transactions are with enterprises like WalMart and Starbucks, slick and faceless entities where haggling is unthinkable, where the passionate intercourse of trade has been neutered, turned into a family-safe, sexless politesse.

eBay makes us all into participants in the market again. It's no coincidence that eBay's first great wave of participation came from the collectibles trade. The collectibles market occurs at the intersection of luck (discovering a piece at a yard sale or thrift shop), knowledge (recognizing its value), market sense (locating a buyer for the goods), and salesmanship (describing the piece's properties attractively). It requires little startup capital and lots of smarts, something that each of us possesses in some measure.

Somewhere, in the world's attics and basements, are all the treasures of history. Someone is using the Canopic jar containing Queen Nefertiti's preserved spleen as an ashtray. Someone is using George Washington's false teeth as a paperweight. Somewhere, a mouse is nibbling at a frayed carton containing the lost gold of El Dorado. A Yahoo! for junk would never break even: you simply couldn't source enough crack junque ninjas to infiltrate and catalog the world's storehouses of *tchotchkes*, white elephants and curios.

And like Napster found the cheapest way to get all the music online, eBay has found the most cost-effective means of cataloging the world's attics and basements. It's attic-Napster, and it has spread the cost and effort around. When you spy a nice casino ashtray on the 25-cent shelf at Thrift Town and snap its pic and put it up on eBay, and when the renowned collector of glass ashtrays, ColBatGuano, bids it up to $400, you have taken part in a market transaction that has simultaneously cataloged a nice bit of bric-a-brac and moved it to a collection where it will be lovingly cared for?and you've left a record of where it is and what it was worth when last we saw it. Buried in eBay's backup tapes is a Blue Book with the last known value of nearly every object we have ever created as a species, from Trinitite (green, faintly radioactive glass fused at the detonation of the first nuclear explosion at Los Alamos, $2.59 a gram at last check) to commodity 40-gigabyte laptop hard-drives ($30 at press-time and falling fast).

Collectors and the junk-pushers who service them have long relied on reputation to manage their relationships. When a picker finds a Hank Williams rookie card at a Volunteer Fire Department Ladies' Auxiliary yard sale at the end of a dusty dirt road and contacts a few customers in Japan, New York, and Frankfurt to arrange for a bidding war and sale, they all need to trust one another. The collectors and the seller need to know that the goods and the cash can be exchanged in confidence before they begin the bidding.

But reputation doesn't scale?that's one of the factors that keeps the laity away from the market's pulpit. No one wants to be the sucker who gives a fellow on the street $500 for a dodgy "diamond bracelet" and ends up with $5 worth of paste-gems. No one wants to get taken by a respondent to a classified car-sale ad who vanishes with your vintage VW Beetle, leaving a rubber check behind.

Geeks have been trying to find a system to allow strangers to trust each other online for decades, and they're still at it. The systems that have emerged are plagued by the need to balance simplicity and accuracy, and being geeks, most engineers have produced reputation systems that require a subtle and rarefied grasp of philosophy and cryptography to get your arms around.

eBay's reputation system is as ingenious as it is simple. It's a streamlined Better Business Bureau, one that's nimble enough to cope with the rapid growth of eBay. And as fascinating as it is when it works, it's even more interesting (and heartbreaking) when it fails, as when a seller with many years' good-standing suddenly lists five $5,000 laptops and disappears with the cash.

The interplay of reputation, buyers, sellers, and goods is what makes auctions so exciting and paradoxical. The more interested bidders there are, the higher the price goes, but high prices attract more sellers, which lowers the closing price of the goods. Add in a few negative feedbacks for some of the bidders and a few more for some of the sellers and you've got an interaction as unpredictable and interesting and mysterious as the weather.

In all this high-minded business about bidding and selling and markets and human striving, it's important not to lose sight of what makes eBay so fiendishly addictive: you can sell anything. You can buy anything. Anything. You can get bargains. You can turn trash into treasure. You can turn your cottage's furnishings into a cottage industry, serving hipster doofuses on the West Coast who've rediscovered seventies kitsch. You can write code that automates this process!

Me, I collect vintage Disney theme park memorabilia. That's my kink. When I started shopping on eBay, this was a manageable habit. I could go through four or five pages of new listings every morning while I listened to the news, and put down a few bids on fright-masks from the Haunted Mansion and cocktail umbrellas from the Tiki Room.

But as eBay grew, the Disney category was overrun with sellers?Disney has made a *lot* of memorabilia over the years?and going through the listings screen by screen became a full-time occupation. So I started to tinker with searches, like this:

> disney* -pin

That is, "show me all listings containing `disney' but not `pin'." Gradually, my search grew, metastasizing into something like this:

> disney* -pin -beanie -pinback -classics -baby -wdcc -watch -t-shirt 
-tshirt -teeshirt -girl* -CD -DVD -VHS

. . . and so on?it grew to 20 kilobytes, and I'd paste it into my browser every morning and get a shower and dress while eBay's poor servers labored under its demands, spitting out a screen-full of likely items.

But eBay's servers grew more taxed, and my demands grew more taxing. My query started timing out.

And I had to develop a new strategy. I went back through all the items that I found particularly interesting, the things I'd bid on or thought hard about bidding on, and went through their bid histories, noting the names of all the people who'd competed with me for the lots. These people, I reasoned, had good enough taste to bid on the things that I liked, and they apparently have enough spare time to search the listings more thoroughly than I do. Why don't I just take a free ride on their labor?

Which is what I did. I searched eBay for all the auctions that my erstwhile competitors were bidding on and I bookmarked each result. Thereafter, instead of trying to use a series of keywords to locate individual items of interest, I used *people*?people who'd bid against me. By watching what they were bidding on, I was able to discover any number of interesting items up on the block, and whenever I bid in a new auction, I got the added bonus of more names to add to my list of researchers who had the knack for finding the stuff I sought.

This strategy worked altogether too well. Not only did I discover many things I wanted to bid on, I won many of the auctions. Too many. Enough that my once-spacious warehouse loft began to bulge at the seams, and my banker took to phoning me up in the middle of the night to ask me in earnest tones if I'd developed a heroin habit.

If he only knew?I was addicted to something far more fiendish: junque, not junk. I am an unabashed junquie, and eBay is the marketplace of *tchotchkes* where I feed my addiction. I'm happy to welcome you all into the fold. Your habit awaits.

?Cory Doctorow

doctorow@craphound.com

Cory Doctorow is the co-editor of "Boing Boing: A Directory of Wonderful Things" (www.boingboing.net) and is the outreach coordinator for the Electronic Frontier Foundation (www.eff.org). Cory is a prolific and award-winning science fiction writer; his first novel, Down and Out in the Magic Kingdom, was recently published by Tor books. He is a regular contributor to Wired magazine and a columnist for the O'Reilly Network.