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Wed Mar 11 2009 11:42:03

EBay Analyst Day Notes

By: David Steiner

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EBay is holding it's first Analyst Day in three years today from 8am to 2:30pm PT. While this won't be a "live blogging" effort, we will post any interesting notes that come out of the meeting here, and break it out for further analysis later. Sorry in advance for typos - I'm not the typist in the family...

We'll be updating this blog post during the day, so check back! BTW, all times are ET, where we are. We don't change time zones for anyone. ;-)

12:45pm ET
Few thoughts in the break:

eBay telegraphed the contents pretty early, so there are no real surprises yet. PayPal is definitely being featured as the "Star" of the portfolio, with the most upside. Look for a PayPal/BML integrated checkout later this year, which eBay hopes will drive incremental purchases. eBay is still a disappointment, so hang on for more changes over the next few years.

I'll take notes for Norrington after the break, but will probably pass up the Skype presentation.

DS

11:15am Mark Rowen VP Investor Relations:


11:20: John Donahoe:

Today we will share with you a different eBay.

What's different
Remaking and transforming eBay marketplace

Strengthening position with PayPal
Strong operational discipline
EBay you know is not the eBay we are or the eBay we will become.

We have a strong portfolio in what is still a young ecommerce landscape

We're not here to mimic or follow. Here to lead and innovate

How we're doing:
Paypal has strengthened it's leadership position
Classifieds continue to grow ahead of ecommerce
Skype continues to grow

We are a strong company. However a years ago our core eBay marktplace has not kept up with changing environment and it continues to fall short.

EBay has a storied past, but we have held on to that past for too long.

This morning you'll hear from each of our business units.

What eBay is aobut is connecting buyers and sellers. 10 years ago the ONLY way we connected B&S was with eBay. 7 years ago we bought PayPal. 5 years ago we started a classifieds biz. Over the past few years we bought Shopping.com Stubhub…

…we can best

5 years ago eBay made up 75% of what we do. PayPal was 20% and other was 5%

today eBay makes up roughly 1/2 and FP is roughly 1/2 that. Auctions are still important, but auctions are about 25%

Classifieds rep 1 bill biz

PayPal is roughly a 1/3

Consumer behaviors are shifting online significantly.
When you shop or pay online it's radically different than it was 5-10 years ago.
11:30 How are we positioning our business to win?

PayPal: Not well understood. 3 highlights:

1) PayPal is powering all of ecommerce globally
2) Unmatched advantages. Rides on top of online banking systems & fin services. It's a hybrid which is very hard to replicated. Only payment platform
3) Future?
Mobile
Nonprofits
Government
Second core business for us. PayPla will become THE online payments service.



eBay:
Leadership position in 39 mkts
Traded 2x volume as the next leading competitor
This marketplace has not kept up. We had to pierce some myths. We've been a victim of our success.

We are not a retailer - we do not aspire to be a retailer. Focusing on the long-tail items, and liquidation (new in-season minus 1)

We're creating the "New" eBay. The pace of change and innovation will be accellerating.
The core eBay mktplce will continue to grow slower than ecommerce in 2009-10, but in 2011 will grow faster.


Wrong about skype connecting buyers and sellers. We're done apologizing for Skype. Great standalone business.

11:45 Skype

One of the fastest growing businesses in history. Path to realize full value for Skype

3 themes that I'm driving across our company.

1) We're becoming a more customer focused and driven company. Netpromoter is what we're using, and bonuses are tied to it.
2) Unlocking technology.
3) Operating Discipline. Never been a co known for cost management. Acted quickly and decisively in economic downturn.

Summary - this is a different eBay. We connect B&S globally and internationally. Expect in next 3 years? PayPal will become leading payment provider. No paper, no plastic, just Paypal
We will transform the eBay marketplace. We will be A leader in ecommerce, and THE leader in secondary marketplace.  Skype will lead a communications revolution.







11:50 Scott Thompson - PayPal

The revolution accepts PayPal.
PayPal bridges Global Financial Network and internet companies
Traditional payment services were built for the offline world. PayPal was built from the ground up for online.

PayPal is like a universal "adapter" for different payment methods online.

PayPal Roots:
It all began with eBay sellers. PayPal allowed sellers to easily accept payments online
Large merchants choose PayPal because it enables them to sell more online.
We will offer later this year the first integrated PayPal/BillMeLater checkout.



Unmatched competitive advantages - more than 10 years experience battling fraudsters.
PayPal has more than 70 mill active accounts and over 3 millions merchants
PayPal grew significantly greater than ecommerce
2011 will process 120bil in transactions (can someone confirm that I heard this #?)





PayPal's take rates are higher on international transactions.

BillMeLater:
Unique value proposition for merchants. Like PayPal

You can offer promotions that offer BML. The offer appears right on the merchants web site. Proven to drive incremental sales and higher values.

BML offers same peace of mind that PayPal does. BML extends credit 1 transaction at a time, so risk is lower. Credit decisions are made transaction by transaction. BML has managed losses thru the downturn better than other credit providers.



By 2011 PayPal expects take rates to grow to $4-5 billion.
Margins expected to be 18-20% long term.

12:30 Break


We've started a new post to cover the eBay presentation here:




Comments (40) | Permalink

Readers Comments

EBay Analyst Day Notes   EBay Analyst Day Notes

by: walter

Wed Mar 11 11:45:08 2009

We've been a victim of our success


Now, we'll be a victim of our stupidity.

EBay Analyst Day Notes   EBay Analyst Day Notes

by: ebay=penny stock

Wed Mar 11 11:56:59 2009

Hopefully ( but doubtful ) the analysts and stockholders will get their heads out of the clouds and realize that this is all ebay spin.

They need to get rid of the idiots that have conceived a lying, corrupt site full of unhappy buyers and exiting sellers.

DONNAHOLE SPEAKS WITH FORKED TONGUE.

EBay Analyst Day Notes   EBay Analyst Day Notes

by: Wb

Wed Mar 11 11:59:17 2009

Unfortunately JD considers the buyers his customers, not the sellers.  Big mistake.  Make more changes to run off the smaller sellers and see where it takes you JD.

EBay Analyst Day Notes   EBay Analyst Day Notes

by: Dave

Wed Mar 11 12:20:11 2009

Great slides!! Very colourful. Too bad about the customer satisfaction.

EBay Analyst Day Notes   EBay Analyst Day Notes

by: Dave

Wed Mar 11 12:29:37 2009

After fighting through the colorful and somewhat obscure slides (just what concept are they trying to crayon in on this one?) it looks like JD and co. are going to focus on PAYPAL as the one bright spot in their self generated panoply of disasters. I suspect that PAYPAL has done well because Donahoe and company have been focussing on ruining Ebay - that jobs pretty well completed now, so onto other areas! Great! The black thumbs have arrived - I suspect we'll see a ton of well-meant but misguided decisions on PAYPAL, and it'll join EBAY in its dive, and no number of colorful and laughably confusing powerpoint balloons will be able to keep it up.

EBay Analyst Day Notes   EBay Analyst Day Notes

by: Clay

Wed Mar 11 12:41:03 2009

PP is doing well because they stopped paper payments, contracted on propay which is more expensive or your own merchant account, again more expensive. Willing to bet any new payment services that signs on to eBay will not undersell PP in any way.

EBay Analyst Day Notes   EBay Analyst Day Notes

by: MsFish213

Wed Mar 11 12:46:17 2009

I think what alot of sellers arent seeing in all this, is that Ebay IS changing, it was planned, and its not going back.  If anyone is still hanging on the hopes of the old Ebay, its not going to happen. That has been made clear today, IMO.   Ebay will become one of many ecommerce platforms (they aren't even aiming for #1 anymore), and are going to focus on becoming the #1 internet financial institution..thats where the money/profit is now.  As they say, ''shows over, folks.  nothing to see here.  move along now.''

EBay Analyst Day Notes   EBay Analyst Day Notes

by: eBay Top Seller

Wed Mar 11 12:47:46 2009

As an eBay Top Seller with 4.9 across the board DSR's and about $100K a month in sales - Who does eBay define as the "Customer"?

EBay Analyst Day Notes   EBay Analyst Day Notes

by: Judy

Wed Mar 11 12:50:26 2009

However a years ago our core eBay marktplace has not kept up with changing environment and it continues to fall short.

The reason it's not keeping up and falling short is because eBay is running off smaller sellers. Someone looking to clean out the attic and make a few bucks has to jump through gobs of hoops just to list 1 item. Then HAVING TO USE Paypal, they will have their funds held for up to 21 days. New sellers frequently don't realize they need to ship even with money on hold and ship with DC to get their money from Paypal. Why has eBay made it so difficult for new sellers to sell. People are hurting in the economy ad want to sell things here and there. Why is eBay making it so difficult. Haven't they heard of KISS?

EBay Analyst Day Notes   EBay Analyst Day Notes

by: voodoo

Wed Mar 11 12:53:32 2009

Ebay Customers = all the scammers, fraudsters and non payers.

EBay Analyst Day Notes   EBay Analyst Day Notes

by: Clay

Wed Mar 11 12:56:13 2009

Integrating Bill Me Later into Pay-Pal....Just what sellers need. Now everyone will be waiting 21 days or longer for payment.

EBay Analyst Day Notes   EBay Analyst Day Notes

by: EX EBAY SELLER & BUYER

Wed Mar 11 13:03:56 2009

I just read ebays all of the above.Just sounds the same to me,just  worded different.It's always about how ebay is helping you.Nothing ever changes.

EBay Analyst Day Notes   EBay Analyst Day Notes

by: o.c.d.collectibles

Wed Mar 11 13:17:55 2009

"Today we will share with you a different eBay."

Yeah, the one that's going to be bankrupt by the end of 2009!

"EBay you know is not the eBay we are or the eBay we will become."

HUHHH???


"EBay has a storied past, but we have held on to that past for too long"


Right, lets make a new start..(sic) we still have to let go of a very successful past!We certainly wouldn't want to remain successful like we once were?Would we????


"PayPal Roots:
It all began with eBay sellers"

REALLY?? which sellers might THOSE be??

"We've been a victim of our success."

No, I think the stockholders are the REAL victims. They've been conned. So have all the sellers who still remain on the site praying for changes to stop getting worse than they already are.

"We are not a retailer - we do not aspire to be a retailer. Focusing on the long-tail items, and liquidation (new in-season minus 1)"

OH!! I SEE!! OVERSTOCKBAY!!!Gotcha!!



"We're not here to mimic or follow. Here to lead and innovate"


Ok, so when ebay was the only online auction site, and then the LARGEST online auction site, why would you want to destroy that and become EXACTLY like OVERSTOCK.COM??DUHHHHH, that's not mimicking, I seee....

"Summary - this is a different eBay. We connect B&S globally and internationally. Expect in next 3 years? PayPal will become leading payment provider. No paper, no plastic, just Paypal
We will transform the eBay marketplace. We will be A leader in ecommerce, and THE leader in secondary marketplace.  Skype will lead a communications revolution.


GEESH, THIS GUY IS SPINNING SO MUCH, HE'S GOING TO BE DIZZY at LUNCHTIME. Don't sit too close to him!LOL!

I think there is some delusions of grandeur around this too. Mr Donanhoe is your typical bipolar. This is the classic type of statement they make.














EBay Analyst Day Notes   EBay Analyst Day Notes

by: gina

Wed Mar 11 13:19:54 2009

sellers are ebays customer's and the buyer's are the sellers customer's why is one more important than the other and is ebay going to make the changes us sellers really need??? a buyer buys then dont pay but they have the power to neg the seller for being stupid enough to open a nonpayment disput!!! its just plain crazy

EBay Analyst Day Notes   EBay Analyst Day Notes

by: Greg

Wed Mar 11 13:41:38 2009

Gina hit it on the bulls eye.

eBay should just be in the business of 'renting' us space to display our merchandise.

Suppose that you open a brick-and-mortar store selling collectables for example.

You rent a shop from someone.

Does your landlord/landlady have the right to tell you how to run your business? Should he/she get involved in operations between you and your customers?

No. They collect their rent, and they're responsible for keeping the property up.

eBay should be collecting fees, and keeping the servers running so we can post our items. That's all.

Just my opinion.

EBay Analyst Day Notes   EBay Analyst Day Notes

by: 979805

Wed Mar 11 15:00:30 2009

I agree with MSFISh that ebay isn't going back, and if anyone is still holding on to that hope its not going to happen.

I personally was never holding on to the hope that ebay would just continue on as normal. I never viewed them as doing a really good job, and always thought that they had a lot of problems that they never addresses.

Now I see them as moving toward a search portal. Trying to be like Google for shopping, they will still have the small seller listing through or directly via ebay. But somehow they want all the items sold on the internet to get exposure through ebay, should be interesting. Like i said before, they are more interested in PayPal growth and eBay is just a customer acquisition tool.

EBay Analyst Day Notes   EBay Analyst Day Notes

by: 290734

Wed Mar 11 15:13:05 2009

If the emphasize is on Paypal, I see why the focus has changed AND WILL CONTINUE to change in favor of the buyer.

eBay/Paypal no longer needs to protect the seller, just the buyer. If I as a buyer feel confident that all my purchases made with paypal are protected I will demand it from every seller or I won't buy from them. Forcing all sellers (not just on eBay) to accept paypal.

EBay Analyst Day Notes   EBay Analyst Day Notes

by: allan Kraig

Wed Mar 11 15:19:48 2009

Hummm Is this the march surprise Griff told us that was coming .. I noticed they got confused on saying HIGH QUALITY SELLERS instead OF HIGH VOLUME JUNK SELLERS WITH BOAT LOADS OF NEG FEEDBACK .. LOL Allan Kraig

EBay Analyst Day Notes   EBay Analyst Day Notes

by: JohnD

Wed Mar 11 16:09:53 2009

Nothing different heard here, JD is nothing more than a copycat CEO, even the above powerpoint presentation is so typical of many of the management seminars we've all been forced to attend one time or another.
I just wonder why no one is questioning the use of PayPal (not regulated) and the thousands of complaints they've had for stealing peoples money. There is even a website dedicated to the horror stories of, basically, theft. There have been thousands of complaints filed with the BBB also. Why is this not talked about and how does it stay in the shadows, sounds more and more like a Madoff clone. I'm I wrong here?, it just seems honesty is out the window and I come away with a feeling of underhandedness??????????????

EBay Analyst Day Notes   EBay Analyst Day Notes

by: GireTheEbayClown!

Wed Mar 11 17:30:30 2009

The ONLY reason Paypal's value increased was because Donahoe's policies FORCED the remaining ebayers to use Paypal.  As Donaho screws the rest of the ebayers, they'll leave ebay too.  Without ebay, Paypal will sink to the bottom of the pit.

http://www.petitiononline.com/jdonohoe/petition.html

FI
RE
DONAHOE!

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