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Wed Jan 25 2006 14:14:23

My Theory on eBay Express and Paid Search

By: Ina Steiner

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If you have listened to eBay management conference calls with analysts over the years, you get the idea that eBay wants to increase the velocity of sales on its site. The faster listings end with a sale, the better. It's no surprise that eBay, which started out with auction listings exclusively, now makes 34 percent of its Gross Merchandise Sales through fixed-price listings.

eBay wants buyers to be able to go to the site, easily find what they are looking for, buy it right away, and ideally pay for it right away. That's what eBay Express is all about.

But I also think eBay Express is about monetizing listings through paid search. And I think eBay will feel free to do things on eBay Express that it can't do on eBay.com because of seller concerns. By making eBay Express "free" for sellers, who pay for those same listings to appear on eBay.com, exposure on eBay Express is all a bonus. So it may be difficult for sellers to complain about eBay Express ads that compete with their own items.

Do a search on eBay's Shopping.com for Black iPod Nano. On the right column and at the bottom of the search results page is something called "Sponsored Listings." These are advertisements (paid listings) that companies have bought, and just like Google Adwords, they are contextual. In other words, Sponsored Listings you see on the iPod search results page are advertisements for iPods.

My guess is that eBay will populate eBay Express with paid listings. It has all that content (listings) to be able to serve up ads. Yahoo is already doing it on its auction platform, but because eBay sellers pay for listings on eBay.com, eBay doesn't have carte blanche to run ads that compete with seller listings on the eBay.com platform.

The question in my mind is whether eBay will use a third-party ad service like Google AdWords or Yahoo Search Marketing, or whether it will use its own service. It has learned firsthand about paid search through its eBay Keywords program, whose results seem underwhelming.

There's been talk of pay-per-call advertising through eBay's Skype service, and eBay Express would be a natural platform for such a paid-ad service.

I don't expect to hear more about this until the actual launch of eBay Express sometime in the Spring. eBay is hosting two events tomorrow that might shed mroe light on the new site, however. At noon PT there will be a Brown Bag Lunch event on the Seller Central discussion board to specifically answer questions about eBay Express (link), and at 2 pm PT there will be a Town Hall event with Bill Cobb to talk about general questions (link).




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Readers Comments

My Theory on eBay Express and Paid Search   My Theory on eBay Express and Paid Search

by: Steve

Thu Jan 26 13:43:53 2006

If Ebay started to display pay-per-click ads on every auction (like Yahoo did), that would upset a lot of sellers because they pay listing and final value fees and want to control content and layout of their auctions. However, Ebay could introduce this optional feature - if a seller decides to include pay-per-click ads into his auction, Ebay would split 50%-50% of all proceeds with that seller up to the amount of fees a seller owns to Ebay - thus preventing abuse of submitting actions just for the sake of generating clicks. Furthermore, clicks from IP address from which an action was submitted, would not count.

In my opinion, this would be a very substantial revenue source for Ebay by itself and as an extra benefit, encourage sellers to post even more auctions in hope listing fees will be subsidized by pay-per-click.



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