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Wed Jan 12 2011 23:30:31

What to Expect from eBay and Amazon Q4 Earnings

By: Ina Steiner

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eBay and Amazon.com will report fourth-quarter and full-year earnings this month. The fourth quarter is key to retail marketplaces, and, according to ComScore, online holiday sales were up 12% from 2009.

Looking at the companies' third-quarter growth rates is probably a good relative indicator of what to expect next week - Amazon Q3-2010 net sales increased 39% year over year, while net transaction revenue for eBay Marketplaces was up 3% in Q3 year-over-year (Total Marketplaces GMV excluding vehicles was up 6% year-over-year, currency neutral; U.S. Marketplaces was up 2%).

Look for eBay to hype PayPal and mobile sales during its earnings release conference with analysts; it will likely point to its initiatives in the fashion vertical and claim early success of its tailored shopping strategy.

Wall Street analysts continue to be patient with eBay Marketplaces and are pleased with its mobile sales and its payment processing unit PayPal. Lazard Capital Markets predicts a 2%+ increase in eBay GMV in the fourth quarter of 2010, and said it remains comfortable with its consensus estimates "in part due to PayPal and International Marketplace strength."

Amazon.com's CFO rarely says much during its conference call, but expect lots of questions from analysts about Kindle, fulfillment centers and international sales and expansion.

Analysts are speculating in great detail about how many Kindles Amazon sold last year and what the future holds for the Kindle. Caris & Co estimates Amazon.com sold 2 million Kindles in 2009 and 4.8 million in 2010, and estimates total Kindle revenue at $277 million in 2009, and $1.3 billion in 2010. It expects an installed base of nearly 20 million by the end of 2012.

Cowen and Company believes that better than expected e-reader sales will hasten the decline of physical bookstores in the U.S. It expects the Kindle platform to grow from an estimated 12 million active users at the end of 2010 to 30 million by the end of 2011, including app-only users. (Consumers can purchase Kindle ebooks that can be read on mobile apps and computers.)

eBay will report earnings on Wednesday, January 19, and Amazon.com will likely report earnings on Thursday, January 27 (updated).




Comments (34) | Permalink

Readers Comments

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: Rick1313

Thu Jan 13 00:14:00 2011

What to expect?

For myself, it is of little interest to me as I expect to see the ''everything is coming up roses'' scenario that is said with every quarterly report. Growth areas are growing, etc. etc. etc.

As far as the corporations are concerned, this very well may be true. However...

The direction that eBay,inc. is traveling is self-evident since 2008 and the next round of changes (to be announced before month's end?) is what will matter to the vast majority of viewers who are using the venue to develop/sustain a business which, unless you have your own separate contract like the big boy accounts, eBay,inc. is determined to make their business (though still stating that they are just a venue, etc. etc. etc.)

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: RicRoe

Thu Jan 13 00:22:35 2011

             ''Look for eBay to hype PayPal and mobile sales during its earnings release conference with analysts; it will likely point to its initiatives in the fashion vertical and claim early success of its tailored shopping strategy. ''

In other words more deflection from the fact that eBay's marketplace is struggling to show meaningful growth, is seriously lagging behind industry trends, and that if it were not for the profit thrown off from PayPal, the truth would be that eBay is sinking.

Sadly, the point that should be focused on -- John Donahoe's continuing long term failure of a turn around plan will be glossed over.

How much longer before those tolerant Wall Street analysts start calling for John Donahoe to be held accountable for the failure of eBay's marketplace to show serious signs of improvement?

eBay does not need more cosmetic changes. eBay does not need more policy changes. eBay does not need more system changes.

eBay needs to equally support sellers of all sizes and reestablish it's credibility with buyers and sellers alike. Unless credibility with buyers and sellers is reestablished, eBay's marketplace will soon sink beyond the point that PayPal profits can hide the truth.

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: Digby
Web Site

Thu Jan 13 00:46:26 2011

@Rich Roe

I have been watching these forums for 1 year now.
Every quarter I see the same predictions.
That Wall Street will finally realise the con job JD has pulled over their eyes.
But it never seems to happen, each quarter he seems to pull it off and get interviewed in some sunny place raving on about his blackberry and the turnaround.

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: look around

Thu Jan 13 06:54:36 2011

I can already smell the dirty roses.

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: John

Thu Jan 13 07:53:35 2011

From the time of his inception eBay's CEO has blamed much of the companies decline on poor seller buyer relations and that they would need time to change things.

How many years was it Mr Donahoe said would be needed? How many years has gone by since his disruptive innovation theory has started.

At some point I would think that the analysts would  realize based on the quarterly figures that his policy is not working. Amazon's quarterly figures should once again prove this.

If Amazon's figures are as high as stated compared to eBay's , how difficult is it to see the percentage difference in earnings has everything to do with poor policy.

The length of time needed by Mr Donahoe to turn things around  and  a final conclusion that the problem was not with sellers and buyers but eBay policy or lack of.  

Both before and after the disruptive innovation.

eBay you can blame just so much on the seller buyer relation as a reason for their problems, but at some point you have to take responsibility for poor policy, poor decision making which  ultimately shows in the  quarterly numbers  of eBay.

But considering the economy, and Amazon's ability to show a high quarterly proves that at least one Company is doing something right.....Wake-up Analysts .  

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: Just a Seller

Thu Jan 13 08:17:44 2011

I much agree with Rick1313 and Digby. Ebay and Wall Street look for data which is irrelevant for us. I know for a fact my business is struggling and that my listings' visibility is poor inspite of 100% positive feedbacks and 5, 4.9, 4.9, 4.9 DSR's.

Ebay can report whatever they want and Wall Street can believe what ever they want. For all I know 2010 was the worse business year I had since I launched on 2005 - with ''worse match'' being the direct reason.

GRRRR.....  

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: summer in the city

Thu Jan 13 09:50:07 2011


If 180 degrees equals a turnaround, Donahoe's goal is already accomplished.

Ebay was a well-liked profitable, thriving, growing enterprise when he took over. And now?

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

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

Thu Jan 13 10:42:02 2011

Here it comes again.

''We LOVE what we're doing and you should too''

More of the pablum that these gullible analysts seem to swallow.

Arguably, analysts  are looking at different factors than the ones that sellers live and die by. In the abstract, I care about ebays growth, but in reality I am only concerned with my own growth.

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: Rick1313

Thu Jan 13 10:56:30 2011

One cannot compare eBay and Amazon''s financial reports because they are not the same type of business.

Amazon sells their own products and allows a certain number of sellers to sell their wares.

eBay,inc. does not sell any physical goods and allows as many sellers as who want to sign up. There are a conduit between buyers and sellers. Plus, and this is the biggie, they own their own payment processor.

They are not the same in the way they operate.

The same can be said if one wants to compare Amazon to Walmart. They are not the same.

One can imagine what eBay,inc.'s stock prices would be if it only consisted of PayPal. It would be through the roof with the way it now stands in the third party payment processors war.

One can talk all they want about how new technology in helping a buyer to make a purchase, but if it is not bringing in NEW buyers (which any business must sustain to keep operating), then it just shifted the buying pattern from sitting in front of your PC to buying while waiting at a bus stop.

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

This user has validated their user name. by: Ming the Merciless

Thu Jan 13 12:45:45 2011

In my opinion, the analysts who look the other way at The Ho's patently obvious long list of failures do so in order to keep investors buying and selling stock.

It doesn't matter to them whether investors get scammed or not; it's about the fees that are generated when shares are traded -- bought or sold, it matters not.

Much of Wall Street and the media that supports these corporate fictions are as corrupt as the corporations they depend on for their fat cat multi billionaire life styles and the ebafia press releases these media outlets propagate as investment advice and news.

Without sufficient regulation and enforcement, this is a closed ecological system that's making the super rich even richer and the rest of us poorer.

If you don't believe this, then check to see how much stock The Ho and his enabler, Pierre Omidyar, have sold since 2007 and calculate how money both earned in salary, stock options, etc.

Next, compare that to your ebay earnings.

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: buck efay

Thu Jan 13 12:53:50 2011

Goggle Checkout brings me new buyers daily. With no effort or listing fees!

For Ebay to be projecting 2% growth, when the economy has grown, online sales up 12% and Amazon will be up about 40% shows Dunderho is an abject failure as a leader.

Ebay should continue trying to be like Amazon. A simple, effective search, a SHOPPING CART, customer service based in the USA and easdily reachable, NEGATIVE f/b ALLOWED FOR BUYER OR SELLER, and real life performance standards, based on real life businesses. The goals ebay has set are ridiculous, and it's amusing in a marquis de sade way that we are held to 99.5% perfection, when EBAY was the ONLY COMPANY to suffer such tremendous losses in national studies in both sales and customer trust. A loss that accelerated greatly in 2010, the year JD said would witness the full turnaround & return to huge growth at Ebay. LOLOLOLOL! Simply Put, Ebay would FAIL by any standard by which I as a seller are measured by. They are under 70% CSR, or C-, when we must get an A or A- to survive. Even Amazon, one of the top 2 highest rated for customer satisfaction is around 88%, or B, B+ range. Ebay really needs to decide what business it wants to be in.

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: My Own Website Not Quite Paying My Bills Yet

Thu Jan 13 12:59:33 2011

"it's about the fees that are generated when shares are traded -- bought or sold, it matters not."

Reminds me of that line from Trading Places said by either Ameche or Bellamy about stocks but it went something like "whether the stock price goes up or goes down, we still make commission."

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

This user has validated their user name. by: Ming the Merciless

Thu Jan 13 13:07:35 2011

I have to disagree some with Summer in the City.

Ebay wasn't thriving when The Ho took over principally because Negged Meg Whitman's idea of a long term growth strategy was to raise fees twice a year, make largely stupid acquisitions, steal proprietary software (see Merc), and keep the technology of the late 1990s.

The problems which are so embarassingly visible today began long before The Ho took over. He simply exacerbated them beyond his willingness to solve. After all, sociopaths don't care how many people are hurt as long as their (the sociopaths') needs are met and narcissists -- most especially MBA narcissists -- are never wrong.

Reversing ebafia's errant course requires drastic and immediate actions not the least of which are eliminating the Best Match system, ridding the ebay.com site of Chinese sellers, uniform standards for all sellers, reasonable enforcement to eliminate counterfeits, elimination of the DSRs, restoration of mutual feedback, a concerted effort to retain quality sellers, and a radical reformation of the Buyer Protection plan which currently prmotes and encourages buyer theft and fraud.

This would be a good start. Until these things happen, the antipathy toward ebafia will continue to grow and ebafia's marketplace will continue to decline.

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: TomH

Thu Jan 13 14:50:19 2011

@ Ming

The only thing I would add to Ming's list would be verification of Buyers and Sellers. In today's world that would be credit card.

I personally would like to see Seller verification by Bank Account and Credit Card and Buyers at least by Bank Account, but credit card preferred.

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

This user has validated their user name. by: Ming the Merciless

Thu Jan 13 14:59:41 2011

@ TomH

You're right. It should havebeen on the List. I've written about this before.

Over the holidays, I had occasion to try to contact buyers via phone because their PayPal address and ebay address were different.

NONE of them had current phone numbers. Even though the ebafia UA says information is to be kept current, reporting bad phone numbers results in no corrective action whatsoever. How hard would be for ebay to send an email through the ebay system telling a member to update their telephone number or be suspended until they do?

But that would mean hiring back some of the CSRs The Ho so proudly fired to make Wall Street happy and holding buyers even minimally accountable.

Too much trouble.

Too much work.

Too expensive. After all, ebafia can and does pass along all the liability onto the backs of sellers.

Don't forget another ebafia seller exterminator -- manager of VP of "seller experience," Todd Litwak. Has ebafia paid for a home security system for this greedy little pig?

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

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

Thu Jan 13 16:08:47 2011

Hey, I thought a number of eBay executives got home security systems. I would have thought that a home security system for all eBay managing executives would have been a quite reasonable business expense given the current state of affection that exists between these cretinous sociopaths and many of eBay’s bomb-throwing sellers.

eBay/PayPal/Donahoe: Dead Men Walking.

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: Departing seller

Thu Jan 13 16:29:07 2011

I don't know much about these reports.  But I do know what I see in my email in-box today:

Your eBay item didn't sell:
Your eBay item didn't sell:
Your eBay item didn't sell:
Your eBay item didn't sell:
Sold, ship now: (Amazon order)
Your eBay item didn't sell:
Sold, ship now: (Amazon order)
Order inquiry from Amazon customer
Sold, ship now: (Amazon order)
Your eBay item didn't sell:
Your eBay item didn't sell:
Sold, ship now: [Expedited Shipping]
Your eBay item didn't sell:
Your eBay item didn't sell:
Your eBay item didn't sell:
Sold, ship now: (Amazon order)
Your eBay item didn't sell:
Sold, ship now: (Amazon order)
Sold, ship now: (Amazon order)

And it goes on like that

Now that eBay's free auction listing special is over, the ''item didn't sell'' emails will finally stop.

At least I didn't invest a cent to NOT SELL my stuff on eBay.

But then, I didn't invest a cent to list on Amazon either.  They earned their fees from me by producing results.

I actually feel a sense of relief since I don't have to worry about taking advantage of eBay's listing special while Amazon is consuming my time with orders.

As an added bonus, no more inquiry emails via eBay about shipping to Italy, Brazil, Poland, or Russia.

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: Departing seller

Thu Jan 13 16:31:37 2011

By the way, Ina.  I love the color scheme of the ''Goodbye 2010'' image.

A picture is worth a thousand words.
And eBay is worth one goodbye.

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: John

Thu Jan 13 16:58:25 2011

Well Amazon may not be like eBay, But they sure know how to attract new sellers, and I am willing to bet ALOT are former eBay sellers...Some links for those who wish to look:....

http://askville.amazon.com/curious-sellers-estimate-Amazon-sell-books/
AnswerViewer.do?requestId=54060884

I
especially like the '' PEOPLE WHO BOUGHT THIS ITEM ALSO BOUGHT''  with emphasis on the book titled selling online 2.0 migrating from eBay to amazon ......

http://www.amazon.com/Sell-Amazon-Marketplace-Fulfillmen
t-Programs/dp/0977240649

What to Expect from eBay and Amazon Q4 Earnings   What to Expect from eBay and Amazon Q4 Earnings

by: Digby
Web Site

Thu Jan 13 23:42:42 2011

I just wish some Wall Street analyst would have the cahones to ask for ebays market place figures so that they/we can do a fair comparison with amazon and ebay.

Then we could do a fair comparison of Paypal to Moneybookers.

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