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Tue Jan 4 2011 19:24:35

Did eBay Blunder with Its Digital Content Strategy?

By: Ina Steiner

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In 2008, eBay banned digital downloads from its marketplace. It wasn't that eBay didn't see a demand for digital content - sellers were successfully listing ebooks three years ago when it abruptly put in place the new policy banning digital downloads.

eBay's Brian Burke explained why eBay created the policy in this March 2008 interview: "Most items that require digital delivery, once created, can be very easily replicated. This ease of replication creates the opportunity for sellers to list thousands of the same item in an attempt to manipulate the Feedback system."

It appeared to be another case of eBay's rogue "Trust & Safety" department influencing marketing policy. But a recent Twitter post from Matt Ackley, eBay's Vice President of Advertising and Internet Marketing at the time, indicates the decision may have been caused by a business-school calculation that failed to take into account real-life technology and marketing innovation: "just think, ebay watched a huge media category die over 5 years because we could not prove the npv....."



NPV stands for Net Present Value, a method MBAs use for determining the time-value of money to appraise long-term projects. eBay CEO John Donahoe was running Marketplaces at the time and used his management-consulting background to impose a numbers-focused management style on eBay.

Now that ebooks are mainstream - Barnes & Noble now sells more digital books than physical books on the world's second largest online bookstore, BN.com - it looks like eBay may have made a strategic mistake that could be costing it millions of dollars in lost revenue.

Now, eBay's only saving grace in the digital-content space is its PayPal online payments unit, which has a micropayment service for digital goods and has partnered with the likes of Facebook and the Financial Times. With A Pew Research Center report showing that 65% of Internet users have paid for online content, at least PayPal will be a part of the growing digital content space.




Comments (30) | Permalink

Readers Comments

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

This user has validated their user name. by: Pete

Tue Jan 4 20:54:01 2011

LOL …eBay the online seller’s friend!!!

They have destroyed so many profitable categories with all their stupid policy/ideas...this is a perfect example.


Off topic (but not so much)

I moved onto Amazon 4 months ago, I receive around 25-30% higher sales price than eBay
I actually get the postage I pay..not a reduced postage cost charge as I am made to accept on  eBay
I have received only ONE Amazon member message in all that time…on eBay literally hundreds of idiotic questions in the same time frame
Oh and I almost forgot sales on Amazon over took eBay after the 3rd week
eBay T&S and Customer support …plus the idiotic and pathetic live help can all Kiss My *ss after the past 5 years of hoop jumping I’m Gone

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: My Own Website Not Quite Paying My Bills Yet

Tue Jan 4 22:30:13 2011


All of Ebay's management team have MBA's which stands for Master Butchering of Auctionsite.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

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

Tue Jan 4 22:45:11 2011

Brian Burke... Brian Burke... Brian Burke...

Rings a bell.

Brian Burke...

Oh yeah, now I remember.

''A neutral is a negative because it isn't a positive''.

THAT Brian Burke.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

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

Tue Jan 4 23:04:49 2011

“This ease of replication creates the opportunity for sellers to list thousands of the same item in an attempt to manipulate the Feedback system.”—Brian Burke.

So, what’s changed; there’s still plenty of unscrupulous sellers dealing in feedback and eBay knows it and still does nothing effective about it.

Do a search for auction items starting in the range 1-10c with free delivery and you will see what I mean.

eBay’s chief headless turkey, John “Noise” Queeg-Donahoe, is an arrogant, ignorant fool.

eBay/PayPal/Donahoe: Dead Men Walking.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: gonefromebay

Tue Jan 4 23:12:38 2011

eBay's "rogue Trust & Safety" department is a perfect description.  As for feedback manipulation ...lol ... guess eBay wanted to do that without the interference of buyers and sellers.

Ebay has destroyed so much.  Can't wait for the next bright idea to surface.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: Sayonara eBay

Tue Jan 4 23:18:47 2011

Why do I get this warm and fuzzy feeling whenever I hear that eBay failed at something?

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: GazLanNaThai This user has validated their user name.
Web Site

Wed Jan 5 01:22:44 2011

It is typical of eBay, that their stupidity and lack of understanding of their own business, led to opening the doors for one of Amazon's greatest success stories.

I wonder if the eBooks marketplace had not been handed to Amazon on a silver platter, if the Kindle and Amazon's digital content division could have become the runaway success that it has become.

It also leads me to wonder if Donahoe is also on Jeff Bezos's covert payroll?  He has made so many decisions that have directly benefited Amazon, that I believe the Wall Street scrutineers should inspect the share portfolio of Donahoe and all his immediate family, including those of his household servants and any nominee directorships they all have.

As to PayPal being a winner in this - Oh Ina, c'mon - surely you understand that seriously merchants in the micro-payments industry won't touch PayPal with a 20-foot bargepole - it's simply too expensive and carries too much risk of fraudulent chargebacks.  How about reporting on the very real alternatives out there - there's a long list of them.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

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

Wed Jan 5 01:38:51 2011

@sayonara ebay

''Why do I get this warm and fuzzy feeling whenever I hear that eBay failed at something?''

How true!

I find it sad and comical at the same time that ebay has created this set of circumstances that sellers who have an active interest in ebays success since they sell there, take such great pleasure in its failures. Only in this ebay created reality would sellers want the venue they sell on to fail.

Its like the disgruntled employee wanting the company they work for to fail because they hate their boss. And put himself out of a job!

Only ebay and JD could create this alternate reality.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: e-memories

Wed Jan 5 02:42:13 2011

Does everyone remember how they started enforcing the ban before the official day announced?

One way in which it's an abject  failure is the 'green' aspect.
(As we all know, ebay loves to tout itself as being so green.)

Instead of DLing the data, under the current scenario, it's absolutely, needlessly *wasting*  resources, polluting the environment, adding to global warming etc as it gets physically shipped, and reshipped.

As pointed out above, they haven't changed a thing in terms of nixing feedback manipulation.

Why can't this billion dollar+++ corporation just have hired some real humans to watch for and remove the one penny wallpaper & other FB scam listings?

They used a cannon to do the job of a flyswatter. They killed off a good a part of themselves.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: JOHNNY

Wed Jan 5 03:14:17 2011

eBay is run by a bunch of stupid white men in suits.

Employees at eBay hold meetings and change things just to change things to show John Donahue they are working on stuff.

The mentality inside eBay is dumbed down, most employees there are going through the motions, over educated, but really didn't learn much in college. Just applying what a textbook told them without incorporating real life and humans to their madness.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: nadine

Wed Jan 5 04:38:07 2011

"Now that ebooks are mainstream - Barnes & Noble now sells more digital books than physical books on the world's second largest online bookstore, BN.com - it looks like eBay may have made a strategic mistake that could be costing it millions of dollars in lost revenue."

Gee, ya think, Ina? But thanks for pointing it out. With today's booming ebook business, it's an excellent time to rub eBay's nose in their own self-inflicted, colossal stupidity.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: No Soup For You

Wed Jan 5 08:21:02 2011

It's amazing. Why do they keep these crackers on the payroll?

eBay had it made prior to Donahoe coming on board. The company has made so many mistakes, destroyed so may sellers and businesses, and their numbers continue to decline when the should have been going up.

The company is run by idiots. It's time to do a housecleaning.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

This user has validated their user name. by: permacrisis

Wed Jan 5 09:09:02 2011

Do bathtubs get wet?

Facebook has made no secret of its intention to take over the entire web- messaging, marketplaces, IM and chat, everything. They have a shot at becoming ebay's stiffest competition- without even thinking about it.

They could drive a stake thru ebay's heart with an auction portal as a mere afterthought. If it happens, I'll be there with bells on. If Mr. Zuckerberg needs to use my items to finish off Mr. Donahoe, they are his for the taking.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: joelhellmann

Wed Jan 5 09:35:50 2011

to paraphrase what President  Lincoln said about General Ambrose Burnside in the Civil War:

Only eBay could grasp another defeat from the jaws of profitability.

People who screw up this often no matter how big go bankrupt.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: My Own Website Not Quite Paying My Bills Yet

Wed Jan 5 10:10:10 2011


To paraphrase Captain Smith:

Relax, this ship is unsinkable.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: Fruity This user has validated their user name.

Wed Jan 5 11:27:55 2011

no. ebay struck alliances with Apple and Microsoft and Yahoo. They simply decided to split up the ecommerce pie

Ebay, Inc profits more from paypal in other channels for ebooks than the offering of ebooks.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: Ron

Wed Jan 5 13:01:21 2011

It's obvious that Donahoe and his team never understood eBay's business model.  Instead, they took a bunch of data and tried to maximize short term profit to the detriment of the long term health of the model.  They're basically a bunch of bean counters, without vision, and sorely lacking true understanding of what eBay needed in the long term for meaningful growth.  And that's why the marketplace division is going to report another marginal quarter in their next earnings report.  Without Paypal, the Emperor would surely be seen to be without clothes.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: Harriet This user has validated their user name.

Wed Jan 5 14:43:35 2011

Ron-

You have the right idea. It was a horrible blunder by people who didn't understand the quirky nature of eBay. eBay has been so destroyed by this management group that I don't think it can ever recover. It's very, very sad. The stock is not doing well, and is having an awfully hard time trying to maintain any forward motion. It gets ahead a little, and then slides right back. It is stuck in a narrow zone.

This blunder was a major one. Sellers knew it when it was done, but nobody paid any attention to their thoughts.

We all need to move on to other venues and get started somewhere else. I just finished my best online holiday sales period ever on eCrater. I am very happy.

If you are doing well on eBay, then God love you. Stay and be happy. But if you aren't doing well there, time to cut the apron strings. eBay taught you how to sell online, now take that information with you and develop your business in a better place.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: Rupert Pupkin

Wed Jan 5 15:04:50 2011

eBay paid lip service to "banning" digitally delivered goods but nevber really enforced the "ban."

The sale of this type of material is endemic throughout the site so their lust for $$ trumps eBay's altruism...as always.

Did eBay Blunder with Its Digital Content Strategy?   Did eBay Blunder with Its Digital Content Strategy?

by: Digby
Web Site

Wed Jan 5 15:09:01 2011

Maybe someone will write an ebook one ebays mistakes and bad decicions.

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