EcommerceBytes-NewsFlash, Number 2377 - September 24, 2010     1 of 4

Donahoe on eBay Search: 6 Months Needed to Reach Goal

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Wall Street Analyst Sandeep Aggarwal of Caris and Company took a tour of eBay on Tuesday and met with top executives. "Overall, Management sounded upbeat about the pace and progress of Marketplaces turnaround," he wrote in a report published Thursday, and said he was told the addressable market opportunities for PayPal have gone up materially in the recent past.

"Based on the conversations," he wrote, "our view is that investors should not read too much into the departure of Lorrie Norrington other than personal reasons," referring to the news that the eBay Marketplaces President was stepping down.

However, eBay CEO John Donahoe said that while search continues to get better, it will take eBay 6 more months to reach where it wants to be with search. (Analysts had been concerned earlier this year that shortcomings in eBay's search functionality could create a glut of merchandise when eBay instituted its "Stores in Core" initiative in March. Aggarwal noted in the report that "the changes made in the US on March 30th have not shown tangible results yet." eBay announced a policy this week that bans sellers from listing duplicate listings.)

According to the report, Donahoe "placed huge emphasis" on eBay's attempt to move from one experience to offering category or vertical level experiences. eBay is focused on creating category level experience for its top five categories, which account for roughly 50% of total GMV for eBay:

  • CSA (clothing, shoes and accessories)
  • Technology
  • Home and Garden
  • Auto Parts
  • Tickets

Some of Aggarwal's other key takeaways regarding the eBay marketplaces include:

  • Close to 28% of listings at eBay offer free shipping.

  • Increasing share of wallet for existing active registered users at eBay is currently more important than the growth of active registered users. Market mix remains targeted towards loyalty versus new users.

  • eBay has recently moved to a new technology code-base that allows eBay to give its users different experiences for different categories and also to launch new categories quickly.

  • eBay's focus has shifted from paid search to get new users to more loyalty and affiliate marketing programs.

In addition, Donahoe said that the current ecommerce penetration in the US is 6% and it can easily double in the next 5 years, and placed sizeable emphasis on mobile Internet helping expand penetration faster.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

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