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eBay building niche, mobile apps to grow user base

Mobile apps that do more than drive buyers to buy auction items are key to eBay's growth.

eBay is continuing to press into markets beyond its original model of running an auction house and global garage sale. And I don't mean it's buying more companies with inexplicable connections to commerce, like Skype. Instead, the company is working on highly targeted apps designed to hook new users into the eBay ecosystem.

The first of these is already out: The iPhone app for eBay Fashion. It's a little subset of eBay, focusing on apparel. It has some special sauce, like a "closet" feature that lets you drop images of clothes you're interested in on a mannequin so you can see how items look together. It also has a cute little augmented reality feature that will put a pair of fake sunglasses on a live cameraphone picture of you; then you can find more-or-less matching, real sunglasses to buy.

Mobile apps are key to eBay since they appeal more to the impulse buyer, and the impulse buyer is more drawn to auctions. Ryan Melcher, eBay's director of mobile products, told me that 60 percent of eBay mobile purchases are auctions, compared with 40 percent on the main Web site. "With mobile," Melcher says, "we are able to extend and to capture new users."

Trying out a pair of virtual glasses. Rafe Needleman/CNET

Melcher also points out that mobile apps improve engagement with auctions and thus drive up auction prices, since without mobile alerts, people can miss out on bids they might otherwise make. The fact that "people were missing out on deals" is the main reason eBay launched in mainstream mobile app.

There are more vertical mobile apps coming. Next up is an eBay Motors app. It will have its own special tricks, like a vehicle identification number (VIN) lookup that will help you learn more about a car you may be interested in buying, or help you find parts for it if you already have. The latter feature possibly gives eBay a little taste of the money you pay on car maintenance even if you don't buy the car via eBay itself. eBay Motors is coming this quarter.

Some time after that, eBay is looking at a special app for electronics purchases. This one will give you access to accessories (like cables) for your purchases, warranty info, and possibly manuals. Melcher says eBay wants to make for users it easy to tell the app what electronics you have and is considering a Tripit-like feature: you mail it your purchase receipts, and it will build your inventory of gear for you.

Outside of segment-specific apps, eBay is also looking to expand its user base, or at least its utility, by making it easier to transact with your immediate social circle instead of the entire world (see also: Oodle goes after Craigslist). Likewise, there are experiments to bring Craigslist-like "hyper-local" commerce to more regions. eBay Classifieds (formerly Kijiji) is still not integrated in the main U.S. eBay site or its mobile app, but this may change.

Recent eBay acquisitions--the local shopping service Milo and the scanner app RedLaser--make perfect sense in light of this new, clear, mission: to bring users to eBay by making the company relevant even for purchases that don't take place in eBay's core marketplace. Paypal, of course, was eBay's most significant example of this direction. But the focus on non-auction utility in vertical markets is especially interesting, and especially so for start-ups looking for a sugar-daddy exit. I don't think eBay is going to be able to build, or even conceive of, all the features it wants to put into its vertical apps.