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Wed Apr 14 2010 23:06:52

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

By: Ina Steiner

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John Donahoe took over from Meg Whitman as CEO on April 1, 2008. Despite the fact that eBay carries no inventory of its own, has no shopping cart, and cannot guarantee transactions, Donahoe's strategy has been to go head-to-head with Amazon.com, convinced that eBay customers wanted the convenience of fixed-price commodities.

Almost two years to the day after Donahoe assumed the CEO position, eBay released Store items into core search, giving buyers exponentially more listings to choose from when shopping. But with the most recent traffic metrics coming out from Nielsen Online, should company and its investors be alarmed about the two-year traffic trends under Donahoe's watch?

I blogged yesterday about how eBay increased the number of listings on the site. While sellers aren't pleased that things have gotten more competitive for them, are consumers appreciating greater choice? Apparently not as much as you'd think. Nielsen traffic numbers show a 13% decrease in traffic in March 2010 compared to March 2008.



Meanwhile, Amazon has been hell-bent on expanding the breadth of its products. Its strategy is an Amazon-eBay hybrid model. Get third-party sellers to front the inventory it can't get itself, letting the 3Ps take on all the risk (just like the eBay model), while twisting merchants' arms to use its FBA fulfillment service so it feels to customers as though they are getting the products from Amazon (including eligibility for the free-shipping deals Amazon.com offers).

Amazon's strategy appears to be working. Traffic to Amazon.com for the month of March was over 17% higher than in March 2008.

We'll learn next week how sales of both marketplaces were impacted by traffic trends when they release first-quarter earnings, and Donahoe will face investors the week after - eBay holds its annual shareholder's meeting on April 29.




Comments (115) | Permalink

Readers Comments

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

This user has validated their user name. by: Mercy the Mingless

Wed Apr 14 23:32:52 2010

On September 27, 2007, eBay CEO John Donahoe spoke at the Legg Mason Capitol Management Thought Leader Forum.  He said this.

''We have such volume that many of our buyers said that there was too much abundance. They just want to buy a Nike watch and instead they get 12,000 results back. That's too many. They want to get to what they want, faster. We agreed.''

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: Another Wronged Seller This user has validated their user name.

Wed Apr 14 23:38:20 2010

You mean JD actually has a strategy? Seriously? One that doesn't involve a fortune teller and tea leaves?

I expect the gap between ebay and amazon to widen even more. More increases for amazon, ebay lucky if they only lose a few percent.

The smart money says amazon cleans ebays clock this QTR too...

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: D ho don't know what d ho is doing

Thu Apr 15 00:21:45 2010

Looks like he's done wonders for Amazon.

Ebay is paying him yet Amazon is benefiting from his wonderful work!

The added traffic to Amazon is most likely the noise crew that left Ebay.

To get those viewers back to Ebay D-HO MUST GO.

He has been nothing but a disaster, turned a feel good company into the worlds most hated online entity.
Let him take his disruption idiocy "plan" and go already PLEASE.

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: guru of change

Thu Apr 15 00:26:58 2010

maybe they need to change something?

They haven't changed anything in what like 2 weeks now!

It's time for a change. Don't let those sellers get comfortable or come up with any good business strategies.
Keep 'em on their toes change change change.

I say they change it into a grocery store. I have some bubble gum I can sell!

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: Troglodyte

Thu Apr 15 01:15:31 2010

IMHO, the real issue here is how much longer stockholders and most analysts are willing to look the other way at declining core marketplace earnings, an incompetent upper management team that has never understood the core marketplace's unique dynamics, questionable accounting and reporting practices, and the corporation's fuindamentally dishonest culture.

Another free ride for the golden boy, Wall Street?

Wall Street's complicity in and promotion of the Great Ebay Lie is typical of the market in general and why no little guy's money is safe there.

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: Kevin

Thu Apr 15 01:18:23 2010

I agree. The guy reshuffles the deck all the time. He will eventually go the catalog listings like Amazon because no one wants to look at 1000 listings of the exact same thing.

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: Troglodyte

Thu Apr 15 01:30:04 2010

Donahoe's personal legacy will be one of boundless arrogance, clinical sociopathy, catastrophic management team decisions, exraordinarily inappropriate management personnel decisions, and a studied refusal to understand both core marketplace and correctly identify its customers.

The more "bad" sellers Donahoe got rid of, the more good buyers left ebay. Now we have Donahoe's "good" sellers defenseless and at the mercy of a growing criminal buyer class.

With one exception.

Donahoe created the perfect home for sellers engaging in illegal shill bidding practices either individually or in shill bidding rings.

In addition to being the world's largest online host for stolen and counterfeit goods, Donahoe can claim all the revenue he generated by facilitating buyer and seller fraud.

Gonna give this guy another pass, Wall Street?

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: Patricia This user has validated their user name.

Thu Apr 15 01:33:20 2010

Well, I hope Jeff Bezos sends Donahoe a bottle of champagne every quarter...that's the very least he can do as a thank you to JD for driving all Ebay's buyers to Amazon ;-)  Keep up the good work John....Jeff is proud of you!

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

This user has validated their user name. by: Philip Cohen

Thu Apr 15 01:47:36 2010

eBay at this very moment has some sort of serious problem: many sellers are squealing like stuck pigs about zero sales in April. Who knows what the problem is? Not even eBay, probably. But it sounds like some sort of rolling blackouts (more dark than light apparently for many) because their servers can’t handle all the crap that is now individually listed. The rusting old hulk appears to be finally dead in the water and is taking on water faster that the pumps can cope.

What would I not give to be a fly on the wall in the bunker at San Jose: to watch these headless turkeys in the executive suite running around in circles, bumping into each other, trying to decide what to do tomorrow, to get those page views up.

Of course, they knew this was coming, that’s why they fiddled with the listing fees, to try to protect their revenue stream. And there is revenue still coming in, from listing fees; but many sellers appear to be not getting what they thought they contracted for for those fees; hang on, yes they are; they’re getting a listing; was there ever any guarantee of actual exposure on the marketplace? Yo’ all had better again read that twenty-seven page contract with eBay that you accepted when you signed on.

(“They have no lawyers in Utopia for they consider them the sort of people whose job it is to disguise the matter of things”—or something like that, someone once said.)

Surely, it’s about time the turkey farmer took his axe to this gaggle; hang on, these turkeys are already headless—and, of course, is not that the whole problem …

An evenings entertainment on the folly of it all at http://www.auctionbytes.com/forum/phpBB/viewtopic.php?p=6502877

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: another side of the coin

Thu Apr 15 01:56:02 2010

Jeff needs to also thank JD for driving sellers to Amazon. JD forgot that sellers were also buyers so he lost two-fold.

Now I heard JD wants sellers to bring in buyers to eBay. He is so far gone with delusions of grandeur that someone needs to put a strait jacket on him and lock him up in a rubber room.

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: charts say it all

Thu Apr 15 02:39:19 2010

wasn't it may of 2008 when disaster hoe of disruption started?

These charts tell the whole story well.

Ebay was winning the traffic war and the stock price wasn't so bad. THEN Disruption boy comes in and gives Amazon the big boost. Ebay never recovered and never will as long as Disruption boy is at the wheel.

He needs to get it through his HUGE BIG head that he will never beat Amazon at their own game and he's damn lucky they don't have auctions for sellers that could sell everything or those charts would be even much much more disturbing evidence of his complete failure. Ebay might have folded by now if Amazon had auctions.

Auctions on Amazon would be like Amazon declaring nuclear war on Ebay.

Amazon launches a nuke and ebay fires back with a string of Chinese firecrackers of which 3/4 are duds!

To think he gets paid for what he does gets me ill and the amount he is paid for absolutely nothing but decline is sickening.

Walmart, Ebay and Target all together as one would have a tough time beating Amazon at their game.

Why D-ho thinks a few struggling clothing designers and most of china's poison, bootleg toxic item pushing merchants can take them on is beyond me?

Americans buying all that Chinese garbage should be ashamed of themselves.
Most just sit and wonder why we have no jobs here at home as they stare longingly at their home full of china made radioactive trinkets!

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: fat frog

Thu Apr 15 06:15:10 2010

I'm willing to bet even thou the numbers will probably not be that good BUT Donna will blame the continuing economy. The analyst and stockholders will still look the other way as they still have there head in the sand. Looking forward to the next three donna months without a change.

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: I Hold a Grudge

Thu Apr 15 07:49:33 2010

To think that this moron John Donahoe gets paid millions of dollars a year to run this company into the ground with the board's approval, and because of his ''disruption'' I can barely make my mortgage payment anymore.

I relied on my eBay sales for the extra cash to help ends meet. It's all but gone now.

Disruptive innovation. Wow.

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: old timer

Thu Apr 15 08:05:29 2010

"John Donahoe took over from Meg Whitman as CEO on April 1, 2008."  So maybe it was the greatest April Fool joke ever?

But seriously, there is some monumental problem here.  When eBay temporarily put store inventory into core in February 2006, like many sellers, I experienced a sharp uptick in sales.  Life was pretty good for that brief period.

Like a lot of sellers, I then believed that if store inventory would return to core, sales would jump based on that earlier experience.  And I was willing to pay more to get that exposure again.  With the changes at the end of March, I got what I thought I wanted.

But so far, my sales have been far worse.  Can I point to the reason?  No, I honestly cannot at this time.  All I know is that there is something dramatically different on eBay in 2010 than in 2006.  And it's not all about the economy.  Yes, there is a continuing recession for a great many Americans, but that alone just doesn't explain what's happening in eBay world.  Maybe it's rolling blackouts, the loss of buyers who were also sellers who left eBay in disgust, and so on infinitum.

If the increased exposure hasn't resulted in increased sales, then I am not willing to pay the increase in costs (in my case, about 130% increase in up front listing costs to maintain my store inventory level).  I am quite willing to pay for services rendered.  eBay is failing to provide the services promised.  They do not get to continue taking my money for non-performance. End of story.

So if we can't fix eBay, it's time that we move on an find other homes for our businesses beyond eBay.

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

This user has validated their user name. by: Al G

Thu Apr 15 10:11:57 2010

Don't forget one thing.

For how many years was Amazon losing money and was a laughingstock of Wall St? Only Jeff Bezos had the vision and tenacity to make small, incremental changes and grow the business.

Amazon invested heavily in physical plant [shipping centres] which contributed to the red ink. But now, it is paying off big time.

eBay on the other hand was profit making from the get-go. What the Harvard MBA's got was a working immensely profitable company and with their hubris proceeded to muck it up.

That is the difference between Amazon and eBay. A CEO dedicated to his vision with a company he founded versus the hired guns who talk the game but have no track record.  

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: My Own Website Not Quite Paying My Bills Yet

Thu Apr 15 10:13:42 2010


If traffic continues to go down, then I'm sure we'll have a new change coming up--FREE LISTINGS! Of course the media will all over it on how you can list for free on Ebay. Oh by the way, final value fees will probably go to 15%.  

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: Doris Knight

Thu Apr 15 10:26:26 2010

Less traffic?? Imagine that!!

So, let's say I'm a regular shopper at Macys... but then one day I arrive at the store and discover that it's stocked to the ceiling with cheap Chinese merchandise (that really *ought* to be at the local Dollar-Store.)

Does a ''wide selection'' impress me? -- NO.
Did I find what I was looking for? -- NO.
Will I continue to shop there? -- NO!!

Sorry, Mr. Donahoe... cluttering up the search results and categories with junk is of little value to most customers.

I suspect this trend will continue unless things change.

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: Kelly

Thu Apr 15 10:42:38 2010

No surprise here. eBay did it to themselves. This is my eBay sales are also going down but Amazon sales continue to grow. Donahoe needs to step aside.

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: Kelly

Thu Apr 15 10:44:16 2010

@Patricia Well said! LOL

Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic   Donahoe's 2-Year eBay Legacy: More Listings, Less Traffic

by: I love to hate JD

Thu Apr 15 11:09:19 2010

A HUGE problem for them are threads just like this one that number in the millions spread out all over the net filled with nothing but bad comments.

They grew from the word of mouth of all the happy mom and pops and simple sellers raging about how awesome ebay is.

Having 10,000+ small sellers happy is much better than having one huge diamond seller happy. Not only will the 10,000 buy much more on site but they add an element of absolutely FREE advertisement. They will make sure to KEEP you being a household name. Not good making bitter enemies with so many, especially when things online can go viral so quickly.

They were right on the cusp of skyrocketing at the end of 2007 with the looming "great recession" at our doorstep they could have become the talk of the town once again with struggling sellers selling everything at great bargain prices to those consumers that were struggling as well.

NOPE....In comes JD and he totally disregards the economic storm on the horizon and he forges ahead with controversial stupid disruptive business strategies and makes damaging changes at the worst possible time.

Instead of the people on the street talking good about ebay...how they saved the day, are recession proof, ect. ect. we have what we have here now. HATRED and still further decline!

The small sellers outnumber the larger sellers and have much LOUDER VOICES!

One might find it wise to respect them even if they tend to be "NOISY" once in awhile.

Making the site safer for all is great but all the manipulation to the way the site once worked is not so great.

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