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Sat Apr 17 2010 13:00:06

Wall Street Longs for Good Old Days of eBay Growth

By: Ina Steiner

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Remember the days when eBay CEO Meg Whitman and Chief Financial Officer Rajiv Dutta had Wall Street analysts swooning during quarterly conference calls with their reports of meteoric (and what seemed like never-ending) growth? On Thursday, it will be CEO John Donahoe and CFO Bob Swan on the line, and analysts are prepared for underwhelming news from the duo.

In their pre-earnings reports, analysts note eBay's under-performing traffic relative to other ecommerce sites and point out Amazon.com's traffic growth and success in attracting eBay sellers. CitiGroup's Mark Mahaney's graphic of ComScore data paints the picture, and he points to what he believes is a cause for decreasing traffic: "We believe that Buyers will continue to migrate away from eBay - taking Sellers along with them - until the overall convenience and trust & safety of the eBay marketplace has materially improved." (eBay's traffic is the orange line, Amazon.com's traffic is the blue line, and Craigslist traffic is the green line.)



Jim Friedland of Cowen Group cites Amazon statistics that confirm the marketplace has been attracting eBay sellers: "Third party sales on Amazon are growing rapidly - slightly faster than first party sales - despite Amazon's aggressive expansion of its own product selection. Third party sellers accounted for 30% of unit sales in 2009, up from 29% of units in 2007-2008 and 28% in 2005-2006. We expect the trend to continue and possibly accelerate as Amazon attracts more sellers from eBay and other channels. The number of third party sellers on Amazon increased 24% y/y in 2009 to more than 1.9 million, compared to 15% growth in 2008 and 18% growth in 2007."

Friedland noted that "eBay's active Marketplaces users increased 3% y/y in Q4:09 to 90.1 million (excluding the Gmarket acquisition), compared to 19% growth in active Amazon customers in the fourth quarter." Here's a nice graphic comparing Amazon.com and eBay.com U.S. GMV (gross sales) from 2001 - 2010 (estimated).



An analyst inclined to be bullish on eBay wrote in an email that he believes with eBay's recent changes to its fee structure, "top merchants have incentive to list more items on eBay.com, helping eBay to offer higher selection and not lose merchants/listings to Amazon." (Let us know how the changes affected your sales in a new survey AuctionBytes is conducting.)

Most analysts remain optimistic about the potential of eBay's PayPal business. Colin Sebastian of Lazard Capital Markets wrote, "Over the coming year, we expect eBay to build off of its current leadership position in online payments, in particular by leveraging its developer network to facilitate product and platform innovations, such as mobile, social networking, and social gaming."

Cowen's Jim Friedland raised an interesting issue in his report: "Is there a chance that eBay will have to collect sales tax on behalf of sellers in the U.S.?" I'll be listening to eBay's conference call Wednesday to see if this issue is something John and Bob are prepared to address. They've certainly got a lot on their plate for Thursday's chat with analysts.

The earnings call is scheduled for April 21 at 2 pm Pacific, and will be webcast through a link on eBay's Investor Relations page. Amazon.com's call is scheduled for the following day.




Comments (122) | Permalink

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Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: Patricia This user has validated their user name.

Sat Apr 17 13:16:05 2010

''We believe that Buyers will continue to migrate away from eBay - taking Sellers along with them - until the overall convenience and trust & safety of the eBay marketplace has materially improved.''

YES...as long as Ebay keeps its lop-sided policies, massive and irradic changes and as long as sellers are fleeced for high fees, NO service, NO traffic and SCAM buyers!  I would already be at Amazon if they had a category for what I sell.  YES, Amazon is also harsh...BUT fair and steady all the same!  At Amazon I know what I would be taking on - at Ebay you simply don't know from day to day.

''An analyst inclined to be bullish on eBay wrote in an email that he believes with eBay's recent changes to its fee structure, ''top merchants have incentive to list more items on eBay.com, helping eBay to offer higher selection and not lose merchants/listings to Amazon.''

This has already proven to be ludicrous.

Wall street cherishes number only...they do not look beneath the numbers to see the rot in a company's business model!  THAT'S what is wrong with Ebay!  I would never buy stock in a company as uncertain and unstable as Ebay!  Ebay desperately needs new management from the top on down.  

Ebay has proven itself to be on the wrong track quarterly report after quarterly report....what is this Donahoe guy holding over the board's heads to make them fall for such pitiful and immature nonsense?

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: fallonthalia
Web Site

Sat Apr 17 13:45:25 2010

"We believe that Buyers will continue to migrate away from eBay - taking Sellers along with them . . . ."  

What?  It should read: We Believe that Sellers will continue to migrate away from eBay--taking Buyers along with them.  

That is what is happening.  Thousands of sellers have already left eBay, and will be leaving eBay in the near future.  I just closed my store a few days ago.  Many are going to Bonanazle and eCrater.  We can not afford the massive fee increases.  My listing fees were going to go from $10.00 to $60.00 a month (I listed around 300 items a month).  And that is before anything sells.  And sales have steadily dropped.

I had a nice business going, and now I have to start all over again.  JD cannot leave eBay fast enough!  

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: CC

Sat Apr 17 14:53:39 2010

Does anyone know when JDs term, or time is up. eBay should only allow their CEO's to serve not more than 2 or 3 years.  

Why does eBay allow 1 CEO to completely destroy a company. They should just get rid of JD, and go back to they way eBay was about 10 years ago.

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: hollow ground

Sat Apr 17 14:55:26 2010

And Wall Street is also to blame. They have turned a blind eye to the actual happenings on Ebay. They have condone Ho and company from day one. This company is unethical and slimy. The Ho has done a great sales job and the morons on wall street have taken his word, hook line and sinker.

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: Ron

Sat Apr 17 15:17:11 2010

@Patricia

Right on!  It's funny, but before I read your comment, I was going to use the same two quotes and make the same comments as you.  Must be true then...LOL!

You're right, it's not trust & safety, it's not convenience, and it's certainly not more listings - it's the value proposition! Ebay used to have one and now they don't.  They used to be a platform that enabled a community of buyers and sellers to exchange and trade diverse and interesting items in a friendly way.  Now it's just - well we know what it is.

I hold 2 MBAs, and honestly, these days I'm almost ashamed to admit it.  Where do these market analysts get their training?  I mean it just sounds like they take whatever BS line of thinking that eBay issues to them and regurgitate it.

It's pretty scary and you'd think that by now someone would realize that the last two years of "disruptive innovation" is not the path to follow.  What was Einstein's definition of insanity - Doing the same thing over and over again and expecting different results?  Someone better wake up.

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: sellers left to seek out alternatives

Sat Apr 17 15:17:36 2010

Treat sellers like crap call them noise and you have what should be expected. The second best solution was for sellers to give Amazon a try.
Now that they have they like it.

One large neon red arrow pointing at D-HO
He is the reason for any and all decline and is responsible for Amazon's growth PERIOD!

Disgruntled ebay sellers buy on amazon now sell on amazon now and promote amazon now. The word amazon has never been spoken more in talk since D-HO took over.

He not only made his name a household name usually followed by some curse words but he made amazon seem much more attractive to everyone paying attention.

I bet Bezos loves when Ebay makes new changes. More coming in June so Amazon will continue to grow while Ebay changes itself right out of business.

Ebay wants to save itself then they must rid itself of the problem Disruptive boy!

Then leave the sellers the hell alone to run their own businesses the way they know best!

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: Harriet This user has validated their user name.

Sat Apr 17 15:36:08 2010

Here's an article about GE. If you change the name GE to eBay, there are so many similarities it's uncanny.

http://www.dailyfinance.com/story/ges-business-model-i
s-broken-and-jeff-immelt-hasnt-fixed-it/19442672/

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: JOHNNYMOJAVE

Sat Apr 17 16:13:15 2010

Once, seems long ago now, eBay was Number 1- and then along came John.

  So John who is in charge of number 1 is jealous of Amazon who is number 2 So now Amazon is number 1 and eBay is number 2.

      Did not quite work out did it John.

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: Hardrock Rules

Sat Apr 17 17:12:34 2010

WRITINGS ON THE WALL PEOPLE ! I now see in my Crystal Ball Donahoe is trying to make it so unbearable for ALL sellers who do not list thousands of items per month, and have our own warehouse and employees, that we just throw our hands up and say to hell with this !

I am not stupid, neither is the Crystal Ball I see it as plain as day, this is Donahoes way of getting us out voluntarily, rather then him saying "I DON'T WANT YOU NO MORE !"

In my opinion you suck also Meg Whitman ! Using eBay for your Political aspirations, having ad's about creating jobs for people when you were with eBay, then bailing and leaving us Donahoe, while you spent insane amounts of money you made off the backs of sellers who Donahoe has been extermintaing the last 2+ years !

Why are we b*tching ? He does not care if we lose our homes, commit suicide, go broke, have a nervous breakdown, heart attack from stress trying to adapt to new standards and changes every few months, etc. There is a NEW EBAY on the Horizon, and it does not include any seller who does not list thousands of items a month.

They do not want the small seller, and that is the truth, I don't care how much they claim they like us, need us, we are treated like sh*t since that man took over !

I wish they would just close eBay down, it has become a joke and shell of what it once was, I know I have suffered very bad nerves, and severe financial problems since Donahoe "DISRUPTED" my business and ability to earn.

Why are we complaining ? Donahoe appears to be an arrogant jerk who goes full steam ahead, his way or the highway, even if 90% to 95% of the sellers told him ENOUGH !

I accept that I am sinking faster then the Titanic from Donahoes Bull Sh*t the last 2 years ! And I am physically and mentally worn out jumping through hoops and readjusting every few months with this lunacy imposed on me by Donahoe and gang. And I am screaming Uncle, I can't take no more, so I accept it, I am out of business very soon on eBay.

I hope you can see someday Mr. Donahoe how you impacted peoples life's very seriously with this crap. Each seller is a person JD, yes REAL PERSON

I need to go vomit I am so upset !

What goodies are us sellers going to get treated with your next changes Johnny Rotten ? Please give us a sneak peak

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: Doris Knight

Sat Apr 17 17:27:16 2010

It's clear to me that John Donahoe's days are numbered. What we're witnessing now is a CEO who already knows he's failed, and the stockholders know it too. He's thrashing around trying to save his ''legacy'', a last-ditch effort to save his job... but unfortunately his efforts all spring from his original ill-conceived ideas and continued disregard for small sellers. Although buyers are important, it's ALWAYS been the *sellers* who made eBay great.

Drive away the great sellers and you lose the best of what eBay had to offer. His contempt for us has always been palpable. His Amazon-envy and efforts to transform eBay into something that it never was (and can never be) is the reason we find ourselves in the situation we're currently in.

It's time for John Donuthole to GO! The sooner the better.

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: J.G.

Sat Apr 17 17:51:38 2010

Any college freshman in Economics 101 could look at these 2 charts and tell you which company to bet on in the future. It doesn't take that 'rocket scientist' to figure this one out.  It ain't eBay!  

Why doesn't the Board of Directors see this? Are they too blinded by the Paypal successes to see that their 'flagship' marketplace operation is foundering? What is it about the downward slope of eBay that they don't understand?   How sad.  Not only is JD and crew to blame for this horrible report card, but the BOD is to blame for letting it go for all of 2009. I swear each of these directors should be given $200 to sell 10 items on eBay and $200 to buy 10 items on eBay and let them wet their feet a little in the eBay pond before they pat JD on the head again next quarter.

It just seems so hopeless. We do this before every end of quarter announcement.  There are so many great posters on Auctionbytes and the message just doesn't get through to the puff-piece media, the analysts who parrot the eBay line and the Board of Directors who don't see a problem with the way things are going.

Right before the 4th quarter 2009 reports came out, I bought Amazon stock because I thought it was a winner.  It's still a winner.  And their future is bright.

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: Digby

Sat Apr 17 17:54:01 2010

Those people that are complaining about JD and falling sales etc should all bite the bullet and stop listing on ebay.
There are plenty of other sites.
I suggest that you try one of the top three alternate sites.
That is the only way to wake up ebay, if that is what you want to do.
Luckily I have not based my living on ebay.

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: Patricia This user has validated their user name.

Sat Apr 17 18:09:06 2010

If you're all expecting JD to say he's been wrong...forget it!  He's going to hang on with his terrible business plan as long as the board allows it.  If he says he's wrong - he's instantly out...and he can forget about his nice compensation package - which is still formidable even after the board cut it 55 percent!  It remains to be seen how much more Koolaid he can serve the board.  I've never seen a group of people that outwardly stupid!

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: Julie

Sat Apr 17 19:15:45 2010


OMG, read these lies coming out of Lorrie Norringtons mouth.

Especially read page 7, what she says about how ebay are helping sellers.

LORRIE IS AN OUTRIGHT LIAR!!!!

http://www.moneycontrol.com/news/business/mobile-comme
rce-to-be-next-drivergrowth-ebay_452194-0.html


Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: J.G.

Sat Apr 17 19:20:05 2010

Oh, I forgot to mention this.  Be sure next Wednesday when the 1st Quarter numbers come out to check for the way they are spun to make it appear that all is indeed well in the Ebay Marketplace.  Last year, they released only the numbers of the entire eBay marketplace but did not disclose the separate www.ebay.com statistics which were not good.  And NO ONE in the media points this out and asks for the specific numbers.  It's 'smoke and mirrors' time again.

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: wow

Sat Apr 17 19:26:39 2010

Funny that chart starts to decline the month Donny ho took over.

Ebay had it all going good for a long time and with a few minor safety tweaks could have bounded up the charts even during the recession.

Bad business Donny ho made all the wrong moves, he made moves no business should EVER make. Changed the auction site into what already failed previously... Ebay express.

It didn't work then and it's obviously not working now.

How low will those charts have to go before there will be no chance to turn them around?

How many more sellers and buyers are they willing to lose with this stupid stupid man's changes?

I'd say right now they are at a critical point in time and the decline will start to happen much faster now.

They need to concentrate on some serious damage control and start with dragging Donny ho out by his ear live on CNN.

He hasn't got a chance in hell at ever being successful with ebay. I knew that from the start!

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: not fooled

Sat Apr 17 20:19:54 2010

Donuthole had a plan in his not so bright head that if he only could lure a slew of major retailers on site he could rise to the top much faster than he could with a slew of mom and pops.

He wanted to use all the traffic the mom and pops had generated now for the large merchants advantage, with his own profits the agenda.
All the while stepping on the little noisy people that built the site.

To keep the large merchants interest he knows the sales must be HUGE every month for them.

He has tried everything to get them the most exposure all the while using the fees paid by the little sellers to finance the whole operation. The little guys have been unknowingly paying for their own demise.

He has taken away featured listings (those blocked items from large merchants that didn't use them), he has changed best match more than once (with the first best match little sellers with sales on multi quantity always stayed on top blocking larger merchants with overpriced stuff not selling as well)
He has put up daily deals only featuring large merchants, he has even devoted front page highlighted tabs to some. Apparently it's not working as people wanted what ebay always had. Hard to find, unique items or cheaper than retail priced commodities.

Now this last best match change has everyone wondering why sales are slow. It's because it favors the HUGE merchants and buries all the paying small time sellers listings.
With a click of a button they can pop thousands and thousands of listings in every category to the front pages all day every day and they don't have to pay anything for it unless they get sales. Smaller sellers can't do that without paying so they are getting killed while still paying listing fees to support the "project".

I wouldn't be surprised if the huge commodities sellers were on auto relist every 30 minutes. He is fixing the "game" to suit them but still collecting from the small sellers to pay the bills until his evil plan succeeds. However it wouldn't succeed even if every little seller was gone, it's just a plain stupid plan to begin with.

Buyers log on to find nothing but overpriced stuff or bootleg Chinese made junk plastered all over every front page in every category.

Gone are the auctions the used to be ending every second and the merchandise that used to flow out the door rapidly like clockwork. Gone is all the excitement and it has been replaced with mundane boring crap and angry sellers who have had nothing to do but complain for two years straight. Buyer scams are through the roof..ect. ect.

In 2008 two months before any of the changes I sold out two entire stores at a very nice profit all using 99 cent auctions. EVERYTHING sold!

Today I couldn't clear out a closet using the same method. What he did with the first round of best crap match totally destroyed the auctions. And I don't care what anyone says THE AUCTIONS WERE THE BEST WAY TO SELL ANYTHING QUICKLY AND CONSISTENTLY!

It kept the site interesting and fun too.

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: unaware This user has validated their user name.

Sat Apr 17 20:33:09 2010

@wow... I agree with you, I think that eBay is in a real critical time right now. I think allot of sellers went along with the April 1st changes and decided to give it a go and see if sales pick-up (I know I did).... but they (and me) are only going to give it a certain time frame (I say 6 months) and if things don't improve there are going to be allot more sellers closing stores and leaving. I know if things don't get better for me in the way of increased sales I am going to pull my 800 Premium store listings and close my store. Where will I go? I sold at flea markets for 20 years and made a living, I can do it again.

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: JoeS

Sat Apr 17 20:50:42 2010

Did Donahoe flunk disruptive innovation?

It's supposed to be innovation that benefits your company while disrupting your competition.

Donahoe got it all backwards as he disrupted his own company, by trampling on his own paying customers, while benefiting his competition.

Wall Street Longs for Good Old Days of eBay Growth   Wall Street Longs for Good Old Days of eBay Growth

by: gotta love it

Sat Apr 17 21:10:25 2010

@not fooled... that is on the best posts I have read, and you hit on all the major points of the demise

I too long for the days when auctions ruled the roost. My eBay business is more less on life support these days. I used to pay thousands in monthly fees which from what I have read others are experiencing the same. These days I am reduced to a list and pray mentallity where more often than not I am stuck sitting on inventory for what seems like forever. I am reaching the point where I am ready to say to hell with eBay and just go and get job in that big bad world once again because I just can't take it anymore. I have tried all the alternatives including having a professionally designed site, but the sales just trickle in. So thanks eBay for ruining all the good times. Since it's your playground and your the bully that drove off all that noise, you can have your playground all to yourself. ENJOY!

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