eBay users form stable groups of common interest

Market segmentation of an online auction site is studied by analyzing the users' bidding behavior. The distribution of user activity is investigated and a network of bidders connected by common interest in individual articles is constructed. The network's cluster structure corresponds to the main user groups according to common interest, exhibiting hierarchy and overlap. Key feature of the analysis is its independence of any similarity measure between the articles offered on eBay, as such a measure would only introduce bias in the analysis. Results are compared to null models based on random networks and clusters are validated and interpreted using the taxonomic classifications of eBay categories. We find clear-cut and coherent interest profiles for the bidders in each cluster. The interest profiles of bidder groups are compared to the classification of articles actually bought by these users during the time span 6-9 months after the initial grouping. The interest profiles discovered remain stable, indicating typical interest profiles in society. Our results show how network theory can be applied successfully to problems of market segmentation and sociological milieu studies with sparse, high dimensional data.Comment: Major revision of the manuscript. Methodological improvements and inclusion of analysis of temporal development of user interests. 19 pages, 12 figures, 5 table