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Wed Feb 9 2011 22:40:19

AuctionBytes Coverage of eBay Analyst Day

By: Ina Steiner

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Welcome to AuctionBytes coverage of eBay Analyst Day, which begins on Thursday morning (February 10, 2011). eBay kicked things off by inviting investors and analysts to a reception and dinner with management this evening to hear eBay's vision of the Future of Shopping and Payments.

In the fall, PayPal shared its vision of a "cashless utopia" in which it would become the standard mechanism by which consumers pay for everything online, offline and on mobile devices, and it seems the theme of this evening's investor schmooze-fest is a promise of a PayPal/eBay "shopping utopia."

eBay executives presenting on Analyst Day tomorrow include:

John Donahoe, President and Chief Executive Officer, eBay Inc.
Bob Swan, Chief Financial Officer and Senior Vice President, Finance, eBay Inc.
Scott Thompson, President, PayPal
Ed Eger, Senior Vice President and General Manager, PayPal North America
Sam Shrauger, Vice President of Global Product and Experience, PayPal
Mark Carges, Senior Vice President Global Products and Chief Technology Officer, eBay Marketplaces
Douglas McCallum, Senior Vice President, eBay Marketplaces Europe
Christopher Payne, Vice President, eBay Marketplaces North America

We'll kick off our coverage at 11:00 am Eastern right here in this blog post, and will tweet using the hashtag #eBayInc.

Bookmark this page, and stay tuned!

11:12 am ET John Donahoe took the stage
Two years ago, could not image the opportunities that exist, eBay's portfolio is positioned to take advantage.

Four trends: social, mobile, local and digital

11:23: Our base of merchant customers has grown - online and increasingly offline

We are driving next generation of commerce.

We believe PayPal has unmatched competitive advantages - we'll drive future of money.

PayPal - can create new opportunity in credit, digital and mobile. It has strong momentum and tremendous potential. PayPal will become bigger than ebay in the next 3 - 5 years.

eBay marketplaces - made substantial progress. Core is stornger today with improved value and selection. We're turning the corner. We will step up marketing to let people know about the new eBay.

eBay becoming more of a technology company.

Donahoe talks about acquisitions like Critical Path and Milo, and mobile apps.

11:30 am ET
Mobile agnostic - our mobile apps will offer consistent experience.

2 years ago - our announcement about opening up PayPal platform. We've turned those words into actions.

Today - growing opportunity - commerce and payments capability - to create an open commerce platform , to accelerate innovation.

Still early in this effort, but we're uniquely position to help merchants scale, innovate and compete, and once again, we don't compete with them.

We're excited, focused, on our toes and we're committed. Driving a strong future for our company and customers worldwide.

11:33 am ET Scott Thompson, President of PayPal takes the stage.

We set aggressive goals in 2009, and were' on track, and expect growth to continue. $3.4 billion in revenue in 2010 between $6 - 7 billion by 2013. Margins are improving.

PayPal is increasingly relevant - digital lifestyle. Only company that bridges traditional payments and the internet.

We've been able to build unmatched advantages that our competitors can't touch. The core of our business. Risk management and anti-fraud capabilities. Sophisticated!

Universal adapter for payments. Direct relationship with both parties - the buyer and the seller, both have PayPal accounts. Closed loop system.

We know what customers are buying, and connect them to sellers to help them get what they want.

Digital wallet - we're the only service positioned to be the wallet in the cloud . Help consumers buy offline and offline.

11:42 am ET
Half of PayPal revenue came from outside the U.S., we meet regulatory requirements in every country we operate in worldwide.

(Thompson is making an argument why no competitors can touch them.)

Ecommerce just a small percentage of retail, positioning for strong growth, and mobile opportunity.

(Now he's talking about the huge market opportunity.)

"The wallet that lives in the cloud."

11:47 am ET Blurring lines of offline and offline - using mobile phones. Driving PP into new addressable opportunities. You'll see PayPal at Point of Sale.
Positioned for strong growth ahead - in eBay and merchant services, and adjacent and seed markets.

You'll hear from Ed Eger Senior Vice President and General Manager, PayPal North America (from CitiBank) and you'll meet Sam Shrauger, Vice President of Global Product and Experience, PayPal

11:48 am ET Ed Eger takes stage.

We did what we said we were going to do, including adding active accounts. Active customers using us 17 percent more today. Helped us grow market share from 14 to 18 percent last year.

Talked about virtuous cycle (more merchants that use PayPal, more consumers want it, and vice versa).

eBay: there's no other payment company that has the kind of relationship that PayPal has with eBay.

PayPal approaches different segments separately with separate value propositions. Can help merchants get up and running. For SMBs, value prop shifts, we provide all-in-one solution.

We bring more consumers and more sales to SMBs - because of the quality of the integration. They see 18 percent increase in sales when add PayPal Express Checkout. Higher conversion and higher sales lift.

12:03 pm ET Fashion is the next big opportunity, same as travel was. It's where consumers are. We're leveraging eBay's leadership position to extend PP's reach. A lot more in the pipeline - Fashion will be the next success story in large merchant.

Eger talks about geographic opportunities. Global expansion puts us in trend in cross border trend. Consumers not nervous buying from unknown seller in another country, trusted PP brand. Xborder trade booming.

Next up: consumer engagement.

In 1st 10 years, focus on merchants, now ramping up consumer engagement. 40 million more active accounts by 2013 - active users. If we get 20% more transactions from what they are doing, you can see what that does to our total transaction payment volume.

How engage consumers? 

Break down consumers:

New (distinct needs, such as security) - rolling out special customer support to address those needs.
Casual users (once in a while) - need to be everywhere they are
Highly engaged (top consumers, they love us) - how to add more value to their PP experience? Consumers want recognition and we rolled out PayPal Advantage - dedicated customer support team, deals from favorite merchants, etc. after 6 months, customer loyalty up 10%

12:10 pm ET On eBay, we just integrated Bill Me Later onto the marketplace last year, finding same synergy as PP and eBay.

eBay is largest source of TTP for BML. Helps drive 25 % higher average order value on eBay. When consumers use BML, they buy more and use PP more often.

Summary - our playbook is working.

Outpacing growth of market; Core bus strong and getting stronger; Lot of runway ahead, just scratching the surface.

12:13 pm ET Sam Shrauger, Vice President of Global Product and Experience, PayPal takes the stage.

Sam doesn't like other forms of payment (money is not secure dirty). New seeds for the future.

- Digital goods ($20 billion market and will grow exponentially).
- Mobile - $180 billion market, poised to explode
- Consumer credit
- Global retail market ($8 trillion)

Much talk about Bill Me Later (BML) and PayPal synergies

Next step - create a better credit market.

(This seems like a new focus today - consumer credit, keep an eye on this.)

Digital goods cross borders effortlessly. People tried virtual currencies, but if you don't use them you lose them. So last year, we offered out solution for digital goods. You don't have to leave the game to pay. Leverages PP's micro payment fees. PP digital goods: $3.X payment volume in 2010. All the brands, such as Zynga, and media (monetize online versions).

12:22 pm ET (Giving a demo of paying for content on

What does it take to win in mobile?

Have to be great at payments, risk management, security, and customer service.
Merchant acceptance, and your mobile wallet in every consumer's hands.

Will double mobile TPV

We can do for mobile payments exactly what we did for online payments - make everything work together. We'll continue to innovate and extend it to customers around the world.

It's also about developers innovating around our platform.

Pace of innovation critical to our success. Our open platform extends value of those ideas. Planting new seeds.

Open platform gives us great oppty at Point of Sale.

12:28 pm ET Giving an example of what the future world will look like using SuperBowl party anecdote.

12:36 pm ET Gave other examples from consumer point of view, now touching upon merchant point of view.

Sellers want more sales - PP can give them that. Reporting, merchandising advice, ability for merchants send coupons

PP gives customers new level of choice.

KEY: PayPal will allow you to change the way you paid (funding source).

12:38 pm ET Scott Thompson takes stage and wraps up.

(20 minute break)

Note that PayPal just took its digital goods solution out of beta - here's a link to the announcement on the PayPal blog.

Note: I wish they had explained this more: "First PayPay changed the way that we pay, next, we're going to allow you to change the way that you paid." Sounds like it will be tied to Bill Me Later, not sure it's as good as it sounds.

1:01 pm ET Presentation resuming momentarily.

1:05 pm ET eBay John Donahoe - searching for new global head of Marketplaces. What you'll hear from Mark Carges, Douglas McCallum, Christopher Payne

Last analyst day, we said we would:
- Fix foundation
- Focus where we can win (Secondary Markets)
- Grow complementary formats

Have made tremendous progress, impoved experience for Buyers and Sellers.

There is a new eBay. Increasing pace of innovation, better search....

We've done what we said we were going to do.

1:09 pm ET
Changed format mix
Fixed Price (F) - growing in line with ecommerce

2010 FP Format grew double digits globally and in the U.S. (at or faster than market). Same for alternative formats

Now we had this auction business. We like it, it brings unique inventory and buyers. Our goal is to get auctions stable.

Focus is driving company where growth is - business sellers and alternative formats.

John is introducing:

Mark Carges, Senior Vice President Global Products and Chief Technology Officer, eBay Marketplaces
Douglas McCallum, Senior Vice President, eBay Marketplaces Europe
Christopher Payne, Vice President, eBay Marketplaces North America

1:11 pm ET Mark Carges takes the stage.

2 years ago I said we'd make significant changes in technology. Our goals were to put customers and technology in the front of our business. We did, and we have tailored shopping experiences.

We have Culture of innovation and World class technology

You want to know, Have you fixed search and improved user experience? We are transforming the way people shop.

Priorities: search, catalog, user experience, platform

Showing slide of what search looked like 2 years ago - not great, he said, and talked about paid placements.
Next, slide of what search looks like today. Have hired a world class search team, invested in improving Best Match - including experiments.

Result: search is much cleaner. Inventory front and center, bigger photos, no more paid ads, fp and auctions mixed nicely, search more intuitive. more relevant searches. Removed duplicate listings.

Search improvements - biggest factor in items sold metric.

Discusses catalog from buyer and seller point of view. eBay shares Price range chart with sellers.

Platform is the reason why eBay can build tailored shopping experiences over devices including mobile.

2 years from now, search will be a competitive advantage for eBay

1:25 pm ET Douglas McCallum, Senior Vice President, eBay Marketplaces Europe

Extraordinary time for eBay across Europe today. eBay UK is lead market for eBay strategies. We are the farthest along in implementing 5 components of our stategy.

Product selection
Tailored shopping experience
Engaging customers marketing

Results in UK demonstrate approach is working.

Net Promotor Score NPS - has outpaced all other competitors - UK consumers trust eBay Uk as much as any other retailer. I've spent 9 years fighting for that, he said a bit emotionally. (Applause from audience.)

Talked about bringing large merchants to eBay UK, rapidly growing B2C market. Featuring new B2C fashion brands.

Showing video featuring Superdry fashion brand, which operates an eBay Outlet Store.

eBay UK mobile shopping was 10% of sales volume. It will intro other tailored shopping experiences - consumer electronics, and will launch in Germany - eBay's largest market.

eBay Classifieds leads classifieds in Germany.

Will significantly increase trust in Germany, where not as strong.

Will increase # of TRS on site, and consumer understanding of buyer protection program and will push PayPal. Is aggressively increasing selection (mentioned acquisition of brands4friends).

eBay has Turbo- charged fashion selection on Germany with acquisition of brands4friends.

We have clear strategy in top 2 markets, and other European markets, potential in Eastern Europe.

1:42 pm ET Talks about Asian markets.

Growth in Austarlia, leveraging trade in China, leader in India.

Cross-border trade represents 20% of GMV for eBay.

Helping TRS sellers to source inventory from China to import and fulfill domestically. Longer term, this approach can drive global growth.

1:44 pm ET Christopher Payne, Vice President, eBay Marketplaces North America takes the stage.

Can eBay compete in U.S. market? Yes

Momentum from growth area, like mobile. We started in the right place, with our customers - focus on customers has driven a better eBay experience for both buyer and the seller.

Important change made in No. America last March, 18 months after similar change in Europe.

Magnitude was far larger than in Europe. By combining all listings (Stores in Core) = nearly tiprled inventory exposure overnight.

It simplified pricing for sellers (I can't believe he said that!)

1) Trust: Consistent, trusted marketplace
Launched and aggressively promoted eBay buyer protection, growing top rated sellers, removed sub-standard sellers.

Proof it's working: Net Promotor Score (NPS) shows trust is improving on eBay. (among those who use ebay most often)

Will continue to expand free shipping on a category by category basis.

Example of eBay doing deals with Diamond sellers:

Barnes & Noble refurb Nooks (ebook readers) - we emailed 20 million people on Thanksgiving about the deal on Nooks - completely sold out of thousands of Nooks, several times.

1:55 pm ET
2) Selection
In addition to merchant deals, our core advantage is consumer selling on eBay. They provide much of the unique inventory on eBay, and they are eBay's best customers. Worth dramatically more to eBay over their lifetime - buy, sell, buy.

Tailored shopping experiences in North America: initial focus in four major categories: ticket, motors, fashion, electronics. Just beginning in Fashion and Electronics.

Will launch Fashion Outlet in 2nd half of year - increased inventory, great buyer experience. Will also focus on electronics.

3) Marketing
Next element of strategy is marketing.

Local commerce - we recently acquired Milo. Some retailers only have physical presence. Getting their products on eBay is exciting for them.

2:04 pm ET Mark Carges takes the stage

Mark is showcasing lists, and how eBay is making them social. Consumer can create a poll to have friends help him make a product decision. Leverage social network to make a better purchase.

Will increase engagement with eBay - we're just getting started. Social is where mobile was 2 years ago.

Augmented reality technology - search by images can become standard.

Some day, hold up mobile phone's camera to product you want to sell, and have eBay's catalog and image technology make it easier to sell product. No one else has this today.

Mark is showing the future with gee-whiz technology, pitching eBay as being positioned to take advantage.

"Synergies across our businesses are clear."

Re PayPal open platform, there is a ton more coming -we'll drive increased synergies btwn ebay and paypal for open patforms.

A lot of innovation coming.

Mark dropped a bomb: eBay acquired 49% of Magento

UPDATED: See news story about eBay's investment in Magento.

eBay will launch marketing campaign in the second half of 2011:
During the break, I went in to see what Chris Payne said about marketing - eBay will ramp it up in the second half of the year, here's what he said:

"The next element of our strategy is going to be marketing. We've intentionally been quiet while we fixed the fundamentals and improved the user experience. Now it's time to talk again.

"Beginning in the second half of this year, you will see us start to market this new eBay experience.

"To that end we announced last quarter that we hired a new Chief Marketing Officer Richelle Parham,... We believe strongly that new marketing will help promote new growth."

3:40 pm ET CFO Bob Swan has taken the stage to give financial guidance to the analysts. (Greg Holden blogging.)

Bob Swan, CFO
Now I'm going to give you some forward looking numbers.
1. Look back since last Analyst Day in 2009
2. Our next three-year journey and expectations for our two core businesses
3. Here's what you can expect from us for 2013

What they said: eBay would be a $10-12 billion business
PayPal would grow to $4-5 billion business
eBay Marketplace $5-$7 billion with 35-45 % margins
Skype would be a $1 billion business

They also talked about operational excellence, and would save $2 billion over three year time frame.

Where are we? Earnings call recently said $10.3 to $10.6 billion in revenue, if you adjust for mergers and acquisitions that puts us in the range we said in '09.

Said margin would be flat and Non-GAAP EPS would be $1.90-$1.95
We think we will be generating $2.3 to $2.9 in coming year
Cites cost savings, and R&D.
Free cash flow: in 2009 we said $6-7 billion, now $6.5 billion

In 2010, transaction revenues from core businesses were less than 50 % of revenue, now becoming a bigger part of what we do.

America business is only 59 percent; Europe 36%; Asia 15%

Leveraging supply base of greater China to provide products to our developers around the world. More diversified portfolio now than in 2010.

I saw more pitfalls when I talked to you in 2009. Today it's more different. Despite the law of large numbers, our e-commerce market growth rate will accelerate. Looking at about approx 15% CAGR in next 3 years. We're talking about roughly 50% of retail, where the lines are blurring, and almost half of retail is being enabled by the Web.

eBay feels good about the macro picture, and its "massive global footprint." Its core businesses are stable, and seeds that will help growth rate for 2013 and beyond.

Speaks about "the enormity of the opportunities in front of us."
Acknowledges increasing competition in e-commerce and payments.

How do you bridge the gap on trust in the core eBay marketplace? Our focus is on policy, incentive, and tech to bring merchants together without competing on our platform.

Regulatory framework: Durbin and PayPal margins.

"Entering year 3 of the first 3-year journey we feel good about where we are."

4:00 pm ET Goes on to address three frameworks: growth, execution, and capital allocation.

Framework for growth: core businesses, "adjacencies" (adjacent businesses), and "seeds" for the future.

Our framework for execution: eBay plans to lower processing costs and fraud; to provide a better customer experience and fewer defects; and to scale the business through leverage. "By eliminating defects that frustrated our customers, we grow capital."

Framework for capital allocation: we plan to invest organically. We feel very good about the credit asset decisioning system of Bill Me Later. Acquisitions will continue to be a part of our portfolio. We will do less opportunistic purchases and a more measured program of purchases.

Goes on to talk abut the eBay component businesses: first, PayPal.

"Falling off a log" is phrase he uses to describe the way PayPal will extend merchant reach on the Web. "A platform that three years ago was roughly $60 billion of TBP we are thinking about $135 billion of TBP in 2013. Also plan for roughly 130 million active users in 2013.

4:11 pm ET
PayPal will generate $6 to $7 billion in revenue. Merchant services to grow 25% at the low end. Seed business and credit services to grow at 35% and above.

What gives us such confidence?

Plan to make PayPal a $40billion plus TPV platform in 2013. Stable use in Americas, increase 10% points to more than 60% in Europe.

Merchant services - they expect this to be a $$125 billion TPV platform in 2013. We will help merchants grow at roughly market rates of growth. We will increase the frequency of use, given the products we are 25% merchants services growth at low end, 40% at high end

New products - Bill Me Later just beginning too get traction; Digital Goods is a $20 billion market and growing; mobile is a $180 billion market and growing.

The developer platform has grown as well to 60K developers with 1500 apps. "We're excited about the engagement of our eveloper community and the possibilities for growth."

PayPal's business model: Has enabled us to generate 63% transaction margins in 2010, we expect the rate to go down in coming years - modestly, fraud losses will be stable, consumer funding choices will decline modestly.

Our operating expense is roughly 42% of revenue. Our efforts to integrate large merchants effectively means the amount we have to pay as a result of sales comes down. Less time handling calls through our contact/ops center. "We will improve the experience for our customers."

Expects transaction margins to be marginally lower, 21 last year, expect to be 24-26% oerating margin in 2013.

In summary: PayPal is expected to be a $6-$7 billion business in 2013.

Marketplaces next.

4:18 pm ET We expect fixed price will be 70% of gross GMV for core business. We assume auction as a format will remain relatively stable over the next few years.

"We feel pretty good about this core platform and the innovations we are making."

We have built some adjacent platforms: today this collection of businesses is a $1.3 billion.

Advertising format will grow in the mid-single-digit range. Ads will be relevant to our buyer and will enhance, not erode, the experience of buying and selling on eBay. StubHub: a wonderful addition.

From $1.3 to $2.0 billion from now to 2013 for this collection of businesses - the "adjacencies".

"Seed" businesses: Milo, Magento, Mobile, Critical Path, RedLaser. Nothing too specific about this.

How they plan to improve customer experience: growing the number of trusted sellers; improving the buyer experience; guaranteeing satisfaction through buyer protection. "The network of data and feedback we use to take bad experiences to eradicate bad guys and boost good guys is part of our search algorithm."

"You don't have to believe a lot about the seeds and the innovation" to believe the operating margins will grow, he says.

4:25 pm ET
We have $8 billion in capital. We will generate $7-$8 B of cash flow in the next few years.

The plan is to capitalize on opportunities in "mobile, social, digital, local" in acquiring businesses. "This is not meant to freak you out. We will be disciplined on how we allocate capital and grow this business." (He says the phrase "we will be disciplined" three times.)

Plan to roughly double PayPal over the next three years.

eBay Inc: revnue goal #13-$15 B for 2013; Non-Gaap EPS CAGR 10-14% 2010-2013

Free cash flow $7.5 to $8.5 2011-2013

"Now we see the crystal ball full of opportunities. We have unmatched competitive advantages that position us to win."

Q&A session has begun.

4:39 pm ET

Q #1. Mark Mahanay with Citi asks: Can you talk about reg risk to PayPal what are the range of outcomes that could happen in the bus model from Durbin bill?

A. Scott Thompson: Three things. One: we have a very small debit card business in the portfolio already. Focused on U.S. businesses that want easy access to money through debit card. Our portion of businsses will go down as a result of Durbin. When regulation comes to pass, debit cards that fund the PP acct will have lower interchange that we end up having to pay. Online is different than offline. Debit card as aq % of transactions online is different than in the offline world. But interchange will go down on those transactions and we will make decisions on whether we give back to merchants in form of price concessions. Can't make a blanket statement on what we will do.

Third thing: the question they asked at the very end of the proposal, should all networks like PayPal be regulated as a network as others will be? We will submit our opinion on that shortly. It is to be determined what the ruling will be. My opinion is there is no thought process I can use that will translate into PP being a payment network that processes debit cards like the others. We aren't treated as a payment network. The great majority of all transactions we process, the money is in another account, a foreign account, it is not in a PayPal account.

CFO Bob Swan asks: Think about possible indirect impact of amendment on what they may do to ACH. What is the indirect impact on ACH?

A. Scott Thompson: Will the cost to process ACH transactions go up? Understand the way ACH works in this country; it is highly unlikely that will happen, there are too many things that would have to align. The U.S. government sets through its activities the competitive price for ACH transactions. Second, we have long term contracts for ACH processing in this country. We are very comfortable with the strategic partners we use for this. Anything that might happen would not happen until those contracts expire.

Third, looking forward, were it to happen, we have capability to bundle multiple transactions together and to process one item because of multiple transactions. We have a lot of flexibility. There are technology solutions that will help us offset any increase in ACH transactions.

John: We see the impact as neutral to positive.

Q #2: Spencer Wong, Credit Suisse: For Mark or John, Shipping incentives seem tobe a diffeerntitating factor for e-commerce players, and shortened delivery times, next day as well as same day. What are you doing to address that on eBay. For Bob, how much cost structure is fixed versus variable?

John: On shipping, Christopher talked about the growth of free shipping. In terms of shipping timing, our product is such that a seller can offer shipping upgrade in checkout flow. That's a very marketplace-like approach. Second, we made a big effort of incenting sellers to put tracing or tracking in. Buyers care more about the ability to track the item [than if it comes in four days or next day]. A lot of eBay buyers, four days is fine; they just want to know it's coming.

4:51 pm ET

CFO: Other end of the spectrum you are dealing with GNA, roughly 10% that is in fixed category, in middle you have product and technology, we will continue to invest in that. The other component is our CS centers, {CF centers?] call centers, I think

Q. Heath Terry, Kenecord: What kind of impact tdo you expect in PP from facebooks transition to credits?

A) Scott Thompson: We have a terrific relationship with FAcebook. PayPal is a widely used payment method for buying Facebook credits; we hope that will continue. Our share is a healthy share, but not something we would share with you. In terms of what they might do with credits on forward looking basis, two things: when you pay with PayPal, you are paying with real money. For those who want to pay with virtual currency it could be an appealing value proposition but I don’t view those as competing.

John: two thoughts. One, illustrates the power of the Paypal platform. Facebook does not want to get into the money part of payments. By opening up our platform we can enable that. Second thought, Sam said this a.m., those platforms, Facebook, iPhone, Android. Charge __ %. Android charges 5% PayPal is a far more profitable way.

Q. Ben Schacter, McCrory: You have to have operational changes, but can you talk about the marketing message to show thaqt things have changed? On PayPal how impt are cross-border transactions?

A. John; Our marketing expense has roughly been consistent over time. We used to do a fair amount of TV. You don’t see Internet companies doing TV because there isn’t much ROI. More digital spending. More oriented toward loyalty or retention versus customer acquisition. We have been rel dark about the new eBay, when are you going to go out and tell the story. We are telling the story in the UK. He had a clear cut message try the fashion application. Picked up a viral buzz. We think in north America and Germany second half of year wil be able to focus that marketing message in a way that cuts through so consumers will recognize this is a different eBay.

CFO: on the PayPal question, it’s been an increasing portion of the PP business (cross border trade). Our expectation is it will continue to increase as a percentage of the total to roughly 25%.

Q. Sandeep Agarwal:  How do you feel about Amazsonn’s attempt to ramp up its C2C business? Encouraging people to sell used goods. Secondly, how much

A. John: I’m not focusing on what other companies are doing in C2C, I’m focusing on what we’re doing. One, classifieds, own 25% of Cragislist, have launched eBay classifieds, in many countries we are the leading classifieds provider. On the eBay core platform, you have seen how it is easier to list, and listing from your phone. Second, the trend of the “instant sale” where there is an intermediary, you sell iPhone, and you are done. A third party, CE Exchange, refurbishes it and resells it on eBay as a business seller. We’re going to continue pushing those two trends.

A. (Mark Carges?): We have also been able to do pilots around consumer sellers, DVDs and so on. Once they list it on the iPhone, we send an envelope out so by the time the auction ended they have the envelope and can send it out. Was very successful. We will be working with the postal services around making shipping eaiser on the platform.

NOTE: From hereon out, we'll just give a brief recap of the questions and answers - Editor.

Q: Ken (Analyst): Another question for PayPal and cross-border. (SWIFT)

Scott Thompson tackles it. How PayPal helps merchants who want to engage in international selling.

Q: Scott Kesler: Update on China

Scott Thompson and John Donahoe discuss.
JD: We have a 5 - 10 year timeline in China. Mentioned Jack Ma's "eBay Live" (he's referring to Alifest).
Scott Thompson - mostly cross border trade.

Regulatory environment is changing, but PayPal not licensed for domestic trade today.

5:00 pm ET

Q: Colin (analyst) GMV, and Technology to drive GMV

JD: Was focused on velocity because of recession to sell more, now operating more toward GMV in fourth quarter. Now more focused on Average Selling Price.

Q: Nick (analyst) from Generation: More on mobile commerce in emerging markets.

Scott Thompson: Mobile works where PayPal is localized; in those markets, but mobile comes up short where we don't have fully localized PayPal wallet in a country.

JD: PayPal Mobile in Emerging markets: India and Brazil first.

Q: Question from Analyst about Milo

JD: merchant acceptedness about getting help in a multi-channel world. Michael Jones leading sales force efforts. We're looking at partnerships. We're big enough that the retailers want to talk to us.

We're not having any trouble meeting with CEOs on down at retailers.

5:09 pm ET

Mark Carges: we're not looking at a CPC model, we're looking to sell products on eBay. People will then go to the store. Very nascent, we'll be experimenting on eBay and on Milo, and talking to large and small merchants.

Eyeball to foot traffic.

JD: Groupon - unlocking a trend.

5:12 pm ET

Q: Question from analyst about large retailers and Bill Me Later.

JD: Diamond Sellers. Pricing customization - we only charge them if they sell

ST: Talked about BML and creditworthiness of BML customers. (Goes on quite a bit about BML)

BS also talks about BML. Don't offer BML unless we know we can say yes.

Q: Brian from UBS - regarding mobile apps - what have you learned to bring back to the desktop site.

Mark Carges talks about ipad experience,... and simple PayPal checkout experiences.

JD: Gives you the chance to get simple again.

Q: Unified shopping cart - when? And Fashion Vault - your play into the flash sales; yet in Germany you acquired a company instead of growing it organically. Could same thing happen here?

Mark Carges: we're building shopping basket in UK. For a small percentage of shoppers, it's not opt-out. Once we figure out how to do it, we can roll it out, we're looking to ramp it in UK in first half of year.

JD: Fashion Vault - merchants want to deal directly with who will distribute inventory. Merchants want to work with us directly. Not a lot of big brands in Germany

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Readers Comments

Perminate Link for AuctionBytes Coverage of eBay Analyst Day   AuctionBytes Coverage of eBay Analyst Day

This user has validated their user name. by: Ming the Merciless

Wed Feb 9 23:43:24 2011

"Cashless utopia?"

I just had to take a double dose of Prilosec.

Nero hypes and while the marketplace burns.

Look at our shiny new mobile payments ap!

Look at our shiny new cashless utopia!

But whatever you do, don't look at the US marketplace.

Perminate Link for AuctionBytes Coverage of eBay Analyst Day   AuctionBytes Coverage of eBay Analyst Day

by: Sayonara eBay

Thu Feb 10 00:25:28 2011


paypal, paypal, mobile, paypal, mobile, apps, paypal paypal paypal, mobile mobile.

US MARKETPLACE: We've turned a corner, things are going along as planned, we've got to do better, things are looking good, we're right on schedule, we're on our front toes, we're on our back toes,  we're going to get aggressive, paypal, mobile,mobile.

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by: Smitty This user has validated their user name.

Thu Feb 10 00:53:47 2011

@ Ming
''But whatever you do, don't look at the US marketplace.''

Why do you want to rain on their parade. The analysts are going to eat, drink and schmooze and go home happy as pigs in something or other.

Your constant attempts at bringing Wall St into the reality of the ebay situation, is really not to their liking.

They would much rather listen to JD's tales (fantisies), than doubters like us. What in the world could 10+ year ebay sellers have to say that Wall St would take seriously?

As you well know, Wall St is ONLY interested in the fees they get by moving the stock from one sucker to another.

Remember, they made billions hustling Enron's shares.

BTW, here is a link to a great YouTube video explaining the bank bailouts for those of you not fully understanding them. Because David & Ina don't allow live links, you will need to copy and paste this to another window.


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This user has validated their user name. by: Tula

Thu Feb 10 10:24:42 2011

An analyst on CNBC yesterday dismissed eBay's marketplace, saying Paypal was where all the growth would be. That's something all of us who use eBay could have told them a long time ago.

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by: Roger

Thu Feb 10 11:15:04 2011

Thanks so much for doing this!!

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by: old timer

Thu Feb 10 11:53:10 2011

"We've been able to build unmatched advantages that our competitors can't touch."

That is a pretty arrogant statement to make. Does eBay/PayPal totally believe that none of the big financial players can be a real competitor?

I admit that the big banks may be a bit more restricted since PayPal doesn't seem to be under the same regulations, but that could change at the drop of a new government regulatory initiative. I have to believe that some of the big finance/credit card players will become significant competition to PayPal if they decide that there is sufficient profit to be made in handling on-line payments. Unfortunately Google hasn't become as much of a competitor as many expected/hoped. But I certainly wouldn't rule out some of the other players.

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by: old timer

Thu Feb 10 11:57:25 2011

"eBay: there's no other payment company that has the kind of relationship that PayPal has with eBay."

Isn't that the truth! But how much of that is due to eBay's highly restrictive payment policies? I believe that many eBay sellers would prefer to be able to offer other payment options, but are not allowed to by eBay, not because of an open market.

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by: On Lies and Secrets This user has validated their user name.

Thu Feb 10 12:11:53 2011

Donahoe: ''Four trends: social, mobile, local and digital''

If memory serves me correctly, the ebay corporation already dropped the ball and missed opportunities to really innovate with several of these.  The ebay corporation did acquire skype which enables social interaction through digital technology, yet ebay management could never figure out how to integrate skype with the rest of the ebay corporation. (Incidentally, there is a skype client for mobile devices).  So suddenly, we are all supposed to believe that the same management team who couldn't think their way out of a wet paper bag with skype can suddenly become an industry leader in social media and mobile applications?

The emperor has no clothes.

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by: really?

Thu Feb 10 12:18:34 2011

How many years in a row can they be:

That must be one helluva corner if there still turning it after 3 years.

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by: On Lies and Secrets This user has validated their user name.

Thu Feb 10 12:42:12 2011

In the discourses about the ebay corporation, ebay management appears to be making a separate distinction between marketplaces (which is languishing) and paypal (which is growing).  What I am not hearing in their discourse is a full disclosure about the reciprocal relationship between the growth of paypal and the health of ebay marketplaces.  Paypal experienced tremendous growth during the time that it was forced on ebay marketplaces users (both buyers and sellers) as many posters here have been pointing out for a long time.  So, a lot of the  apparent ''growth'' of paypal was directly dependent on its forced adoption by users of ebay marketplaces.  But even with the adoption of mobile technologies, marketplaces in the US is now floundering (and ''floundering'' is a generous way to describe what is actually happening).  IMO analysts should not dismiss the health of ebay marketplaces when considering the overall state of the ebay corporation.  IMO, lot is being swept under the rug and omitted by ebay management.

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by: Barbara

Thu Feb 10 12:44:55 2011

Looks like Ebay is doing the same as all of us; not putting all the eggs in one basket.  I do believe the sellers heavy exodus has hurt Ebay, the same way the Ebay policy changes hurt sellers. I for one, have many venues that create my income now, not just Ebay.  Ebay seems to be building the company laterally so that Ebay Marketplaces will not count so heavily into their profit totals.  Only problem for them is the major banks can and will bring Paypal down; its only a matter of time.  And then really what is left?  A house of cards.

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by: Joe Average

Thu Feb 10 12:45:38 2011

PayPal and eBay have no customer loyalty. If a viable alternative site were introduced by a major player ie Google, it would be game over. The big picture: eBay continues to loose market share, growth momentum has slowed. The online market place is growing much faster than eBay.

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by: Joe Average

Thu Feb 10 13:01:33 2011

Cut through the rhetoric:

"Deutsche Bank continues to reiterate its Sell rating and $22 price target on shares of eBay Inc."

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by: John

Thu Feb 10 13:07:14 2011

Nothing personal Ina, but you should have warned us in advance before reading your update,  that we should have a barf bag in hand. Luckily I made it to the bathroom in time.

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This user has validated their user name. by: Ming the Merciless

Thu Feb 10 13:11:47 2011

What makes Wall Street believe that The Ho will do any better making PayPal a "cashless utopia" than he did disruptively innovating the marketplace?

At some point in time, the big banks with millions of credit card customers are going to dismantle The Ho's cloud.

While I dislike them nearly as m much as I dislike the ebafia/PreyPal syndicate, it will be fun to watch.

Demand PayPal be regulated. NOW.

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by: Robert

Thu Feb 10 13:15:46 2011

Per eBay.....

"Have made tremendous progress, impoved experience for Buyers and Sellers."

That statement about making an improved experience for sellers, is BS!  

It gets worse every year with those DSR stars, not as described, best match, etc.

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by: AC_in_Mich

Thu Feb 10 13:19:36 2011

1: Oh, look - even with Demanding you take Paypal on eBay, it still only has 85% penetration.

2: Yes, Digital Goods, that rapidly growing market that Merchants throughout the world can use Paypal for processing - Unless you are an eBayer.


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by: Joe Average

Thu Feb 10 13:30:48 2011

Despite makeover, eBay losing market share:>2070389/-1/BUSINESS

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by: Joe Average

Thu Feb 10 13:34:21 2011

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by: walter

Thu Feb 10 14:12:24 2011

Pretty meaningless charts full of bologna.

Just ask Tommy billionaire big business who-filgered and Calvin ebay klein how many underwears they each sold this week on ebay.

Not enough to pay the electric bill for a day :)

Dono-shcmoozer is ONE BIG HOT AIR BAFFOON.


I haven't seen a Calvin or a Hillfigger item being worn by anyone since the fresh prince was the king of Bel - aire

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