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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 AutoSport.com.)

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

Search
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.

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

Platform
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.

Trust
Product selection
Tailored shopping experience
Engaging customers marketing
Innovation

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.


Q&A
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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Sat Feb 12 17:16:59 2011

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Fargo, ND 58103-2312

E-mail Ed during the show!
ed@edschultzshow.com

wendyjoschultz@yahoo.com

You can also reach him at MSNBC in Rockefeller Center, NYC.

Many people still believe that ebay is an all American enterprise where Americans can sell things. It no longer is not does it deserve to be thought of as either wholesome or American.

Some talking points:

1. How ebay recruited mom and pop American sellers selling American made items and then threw them under John Donahoe's bus in favor of Chinese made products and sellers.

2. Any suicides or divorces you're have concrete knowledge of.

3. Did you lose your car, home, health insurance, or ability to pay college tuition for your children?

4. Bankruptcy?

5. Welfare; WIC?

6. Impact on credit rating?

Tell Ed how The Ho is giving preferential treatment to Chinese sellers on the AMERICAN ebay site and Big Box stores selling Chinese made goods.

1. No listing fees for Chinese on ebay.com; no listing fees and lower Final Value Fees for Diamonds.

2. Descoring (removing) low DSRs and negative feedback for Diamonds only.

3. How the Chinese sellers often are selling inferior goods with brand names shoddily made after hours.

4. How American sellers have been unfairly treated in ALL aspects of selling on ebay.

5. Reference Auctionbytes and the Steiners as journalists who can verify ebay's anti American, pro Communist Chinese policies.

6. Tell Ed about PayPal account holds and takeovers.

7. Tell Ed how ebay says a PayPal complaint anywhere on the net could impact your seller discount on ebay.

8. Tell Ed how ebay policies are ripping off sellers by forcing them to give criminal buyers their money back while buyer keeps item.

9. Most importantly, however, tell him the The Ho has deliberately created an environment where floods and avalanches of millions of Chinese made products are favored over the American made products that American sellers sell.

9. Largest venue in the world for stolen merchandise, knockoffs, porn, counterfeits with little or no policing.

10. Damage to done to USPS and possibly other carriers because of seller exodus and the destructions of thousands of small businesses.

11. Trickle down damage to American companies manufacturing boxes, strapping tape, packing peanuts, etc.

12. Provide some of your own examples of EbaySpeak such as the
2010 "biggest fee decrease in the history of ebay" was actually the biggest fee INCREASE in ebay history for American sellers selling American products.

13. Tell Schultz how ebay has huired LiveWorld to scour the internet and neutralize criticism of ebay.

In your own words send an email, snail nail, or even call him at MSNBC in New York. Schultz DOES listen.

Let's lift the rocks and ask Schultz to shine a strong light  on the slimy creatures underneath.

The more bad publicity ebafia gets about the ir anti American, pro Communist Chinese policies, the more viral our message will become and no amount of LieWorld "social engineering" will be able to fix it.

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by: another side of the coin

Sat Feb 12 17:22:24 2011

It would be interesting to know how many eBay packages went through the USPS from year to year. The drop in the last 2-3 years would have to be staggering.

All the jobs lost, livelihoods and pain instilled just in this short period of time. And then to continue on with all this disruption with no innovation is pure evil and greed.

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by: old timer

Sat Feb 12 17:58:27 2011

JD is courting the Chinese players. If I recall, there was quite some discussion last year that basically said the Chinese businessmen developing a Chinese-owned auction/online selling network were not afraid nor impressed by JD's eBay (something akin that eBay may be a big shark in the ocean, but that the Chinese auction house was the alligator of the Yangtze River and would eat eBay if it entered the Chinese market -- forgive my poor recall of the exact comments, but that was the gist of it). It's become pretty obvious that JD is willing to do almost anything to get into the good graces of the Chinese.

IMHO, JD's a total fool and the Chinese will tolerate him only as long as he benefits the Chinese goals. Once they no longer need his efforts, they will toss him back into the ocean without a lifeboat.

Frankly, I have less problem with the Chinese approach here. I can understand their intentions. My utter distaste is for JD's total incompetence that is leading eBay into the abyss. JD couldn't care less about the collateral damage within the US small seller community or the US buyers either other than their continued ability to buy the piles of foreign made products through eBay.

JD is not a friend of the US Main Street inhabitants. But I also fault those same US buyers/sellers who continue to support the eBay domination. We get to live with our own actions.

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by: Smitty This user has validated their user name.

Sat Feb 12 23:28:47 2011

@ another side of the coin

''It would be interesting to know how many eBay packages went through the USPS from year to year. The drop in the last 2-3 years would have to be staggering.''

Between 2002 & 2008 I shipped almost 1000 items per year. Very close amount year by year and all of the same type.

The average number was 948 for those 7 years.

In 2009 I shipped 55% of those previous years.

In 2010, it dropped to 26%.

Although I only have one month's records for 2011, it appears to be still dropping.

To me though, that is only half the story. The second half, and possibly the most important part, is the dollar amount the items are bringing.

I can only attribute that to the ''improved'' search (best match etc).

I still recall when JD told us;

''We had to create a mind shift at our company–we had to think bold and not just incremental. We had to create a vision of the future so people could let go of a very successful past.”

JD's machinations have certainly done away with that pesky very successful past. When I was a little boy, my comic books (Buck Rogers etc) all contained a vision of the future. Now that I'm nearing the time for me to depart this sphere, I can't recall many of those coming to fruition.

I seriously doubt that John Donahoe's vision of the future will fare any better.

Smitty

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by: another side of the coin

Sat Feb 12 23:45:06 2011

@old timer
It's not so easy to just pull up stakes and move on. Remember eBay told people to quit their day jobs and sell on eBay full-time. After years of building their business and depending on eBay, JD pulls the rug from under these same sellers. It's easy to say not to put all your eggs in one basket but until the other eggs start prospering there is only so much one can do especially in this high unemployment economy. It would be great if everyone had pensions,401k and benefits to tied them over. What JD did, is doing to all these ''mom & pop'' businesses is inexcusable.Old timer you may be all set in your retirement with no worries of paying bills but don't put blame on the victims of this destroyer.

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by: old timer

Sun Feb 13 13:18:14 2011

@another side of the coin

Hang on a minute. I think you've read too much into my view.

First of all, why are you assuming I'm retired and have no financial issues? From my "old timer" name? Let me set that straight for you. I am an "old timer" because I've been selling on eBay for over a decade, not because of my age or retirement status. I wish I had no financial concerns and that I had a large retirement pension coming in the future. Neither is true, so please do not make that invalid assumption.

My point is that sellers and buyers on the internet do have choices other than continuing to support eBay 100%. And it is incumbent upon us individuals to take steps to wean ourselves off of eBay. And I have actually done that over the past two years. The great majority of my product listings are NOT on eBay. Is it easy to "pull up stakes and move on"? Certainly not. Is the traffic off eBay the same? Absolutely not.

And I don't recall that I said that sellers need to terminate their eBay presence totally or immediately. What I have said in the past and continue to advise is that sellers start the transition to other venues or their own web sites while maintaining a presence on eBay. If you don't take that first step, you never start the journey. And in the process we need to learn to USE eBay the way eBay has used us.

I think you and I are in agreement in most things regarding eBay management's track record of "customer service" when it comes to small sellers. I just ask that you not misinterpret my views or assume that they are invalid because of your mistaken assumption of my age/retirement/financial situations. That just misdirects the conversation.

The only blame (other than that directed at eBay's management) I'm putting is on those sellers (and buyers) who complain about eBay's rotten handling of small time sellers and fail to take the baby steps of moving beyond eBay. We shouldn't expect anyone else to do that for us.

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

Sun Feb 13 13:42:16 2011

Although neither will give me any numbers when I've asked, both the postal office I use as well as the postmaster in my medium sized city say outbound parcel shipping has dropped dramatically in the last three years.

In addition to all the small AMERICAN and Canadian businesses The Ho exterminated, many of the packages that were once shipped and received inside North America now arrive from China.

I believe Ed Schultz will take this on this if enough of us tell him our stories.

But we also need to warn him about the ebay and LieWorld trolls who will write him with glowing ebay success stories that simply are NOT true.

CONTACT ED SCHULZ NOW.

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by: BUCK EFAY!

Sun Feb 13 14:52:00 2011

Hey what happened to Fong Donafu's big "seller release 2011" announcement this week? Did he realize they can't afford to "release" any more sellers, LOL????

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by: another side of the coin

Sun Feb 13 22:55:12 2011

Thought this might help push Ming's post along to Ed Schultz.

http://www.bigeddieradio.com/emailEd/

Remember, you can always call Ed during the show:
dial 1-877-WEGOTED (934-6833), Show Hours are 12PM - 3PM Eastern, 9AM - 12PM Pacific. No calls are screened - this is real talk radio.

Email ed@edshultzshow.com

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

Mon Feb 14 17:59:57 2011

The Ho's commentary alone could supply material for months to a decent comedian.

One of my personal favorites was his reference to ebay's "world class technology."

The world he must have been referring to must be Pluto or one of the small asteroids between Mrs. and Jupiter.

Because he sure as hell wasn't referring to this world.

Scott Thompson just on CNBC bragging about how people can send money to Mexico for a $1.50 transaction fee.

Another benefit for illegal immigrants while PreyPal charges North American sellers a minimum of 2.9% + $.30 to receive money.

So in addition to sucking up and favoring the Communist Chinese over North Americans, we can now add illegal immigrants (who will use this service although certainly not exclusively) to the list of special privileged people PreyPal favors over North Americans.

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by: ebayoldgirl

Mon Feb 14 19:19:42 2011

One comment for Ebay and the Big JD - Barfbag

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by: JoeS

Mon Feb 14 20:17:03 2011

Interesting over the top use of the work ''utopia''. In the world of make believe, ''utopias'' can happen. I've said all along Donahoe is living in some kind of out of touch fantasy world and he probably believes that his ''cashless utopia'' can happen. I seriously doubt it since this is the same management that killed the marketplace through fee hikes and bad policies.

So, now crazy Donahoe is looking to focus on Paypal for big gains in eBay's future? Look out sellers, you know what that means, they will now nickel and dime Paypal to death, lol. The writing is on the wall. I dropped Paypal from both my websites after these announcements. I don't need to go through that kind of crap again. Felt good too.

C'mon eveyone let's click our heels together for Donahoe and BELIEVE, ha ha.

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by:

Mon Feb 14 22:36:34 2011

JD is getting into the rap music business. Check it out!

www.youtube.com/watch?v=H7Y5JIcjsPM

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by: Timm
Web Site

Tue Feb 15 04:38:33 2011

phui, eBay now owning 49% of Magento ... what a shame ...

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by: Harriet This user has validated their user name.

Tue Feb 15 14:43:08 2011

I hope all of the analysts are taking off their rose fogged glasses, and have looked at how this stock has performed since 1999. Nothing that I can see points to any kind of recovery at all, just a slow climb out of a very deep hole that happened at the end of 2008 to the very beginning of 2009 when the disruptive, disruption, crayon chart plan was introduced. It is struggling and struggling.

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by: Luxferro This user has validated their user name.

Wed Feb 16 12:23:59 2011

Harriet, how are you calculating this? In Feb 1999, eBay stock was at about $9.50/share.

eBay has had four stock splits since going public. The first split was a 3 for 1 on March 2, 1999. The remaining three splits were all 2 for 1 and occurred on May 25, 2000, August 29, 2003 and February 17, 2005.

So if you had 1 share in 1999, you have 24 today, worth $34 each. If that's not good enough, I think that's exactly the thinking that Wall Street pushes out there and turns into greed!

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by: dee46

Fri Apr 29 21:04:28 2011

''Have made tremendous progress, impoved experience for Buyers and Sellers.''
My, my, ebay is still running in circles and pulling their hair while losing sellers by the thousands. Improved experience is so totally a lie for ''sellers'', after 14 years as a top rated seller we have left ebay for good, and paypal may be next. Ebay exec are clueless about the real world of auction selling and buying. They NEED to go in a different direction before they crash and burn. Not only do I no longer sell on ebay, I no longer shop on ebay. Amazon is my preferred go-to place for most anything I'm looking for, new or used. Ebay has become a very profitable market for scammers and e-commerce thiefs.

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