eBay (EBAY, Financial) operates three growing and highly cash generative businesses that connect buyers and sellers of lower volume, harder-to-find items. The eBay marketplace matches more than 175 million buyers with one billion items, listed by more than 25 million sellers. eBay also owns valuable assets in StubHub, as well as a portfolio of international, market-leading, classifieds websites. We expect the eBay marketplace to continue to co-exist with Amazon as the two destinations satisfy different shopping behaviors. Amazon is the premier online destination for new, in-season goods while eBay’s marketplace primarily serves consumer demand for used, off-season or off-price items. The marketplace business is transitioning to a new payment provider and recently began allowing sellers to advertise on the platform. We believe these initiatives should substantially increase company profits over the next three to five years, even after eBay passes some of the savings back to marketplace participants. We purchased shares of eBay at a multiple that was similar to many brick-and-mortar retailers, which we believe overlooks the company’s higher growth rate and powerful competitive and scale advantages.
From Bill Nygren (Trades, Portfolio)'s Oakmark Fund fourth-quarter 2018 shareholder letter.
