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Thu Apr 28 2011 11:01:15

Live Blogging eBay's 2011 Shareholder Meeting

By: Greg Holden

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Greg Holden is live-blogging the eBay Annual Shareholders meeting for AuctionBytes again this year. The meeting is being held at eBay headquarters at 2161 North First Street, San Jose, California. Greg is reporting from Chicago where he is following the webcast of the meeting. First an introduction and agenda, the meeting is set to kick off at 8 am Pacific time.

Shareholders will vote on a number of agenda items, including a proposal from shareholder John Chevedden of Redondo Beach, California that would do away with eBay's supermajority voting requirement. eBay's bylaws require the vote of holders of at least 66 2/3% of eBay's outstanding stock in order to approve amendments to the bylaws. Chevedden said removing the required supermajority would show that eBay is committed to good corporate governance and its long-term financial performance, and he cited the "need for additional improvement in our company's 2010 reported corporate governance status."

The Agenda
1 To vote on the election of Fred D. Anderson, Edward W. Barnholt, Scott D. Cook, and John J. Donahoe as directors, to hold office until our 2014 Annual Meeting of Stockholders.

2 To hold an advisory vote on compensation of our named executive officers.

3 To hold an advisory vote on the frequency of the advisory vote on compensation of our named executive officers.

4 To ratify the appointment of PricewaterhouseCoopers LLP as our independent auditors for our fiscal year ending December 31, 2011.

5 To consider a stockholder proposal regarding supermajority stockholder voting standards.

6 To transact such other business as may properly come before the meeting or any adjournment or postponement of the meeting.



Hi folks, it's Greg Holden, your faithful AuctionBytes correspondent, ready to report on this year's annual eBay shareholders meeting. I assure you I am an unbiased observer as I closed my own eBay store not long ago. If you need preparation, you might refer to Ina's blog post on the $40M earnings by eBay's executives. I wonder how many used the corporate jet to get to this meeting?

Polls are now open for voting on four directors - watch out for hanging chads!

Second item is compensation of eBay's named executive officers. Again, I refer you to Ina's blog post for background. This is not an insubstantial item.

Ah, discussion on the shareholder to abolish the supermajority requirement: the proposal is read in detail. The proposal won 74-80% support at other companies such as Alcoa.

Another stockholder speaks in opposition to proposal: Mr. ______ does 20-30 shareholder proposals a year and has never shown up to talk in favor in one of his proposals. The criticism he is making of this company, a great company that satisfies millions and billions of people, is that this guy makes too much money.

Polls closed at 8:11 for voting. Well, that was fast.

proposal to elect the four directors approved with 96% of votes cast.

proposal to approve named advisory officers approved.

proposal to approve compensation on an annual basis approved with 88% of vote.

Ratification of Price Waterhouse Coopers approved with 99% of vote.

The stockholder proposal regarding supermajority approved with 66% approved! A blow for superdemocracy!

Stay tuned for coverage of presentation by CEO John Donahoe,....



Meeting is adjourned but John Donohoe to give remarks on the state of the company:

John Donahoe's Presentation
Donohoe points out that Skype is wonderful company, enabling Pierre Omidyar to visit virtually.

"eBay is your company. our goal is to meet the needs of millions and some day, I hope, billions of users around the world."

On financials: $9 billion in revenue, $1.73 earnings per share, this year $10./6 and $1.93 to $1.97 per share projected.

"What's fun, and what is the reality of our everyday lives, is that our industry is at an inflection point. There will be more change in way consumers shop and pay in next 3-5 year than has been in last 10. Reason 1: smartphones. reason 2: local commerce is changing. 3: rise of digital goods, books movies, and video. 4. Social networking that has not really impacted e-commerce but we think it will in next 3-5 years." [Greg's comment Where has he been?]

"In future, consumers will look to have a store in their pocket via their smartphone." [Greg's comment: Is that what *you* want?]





"As the line blurs between online and offline, merchants of all sorts need to go multichannel." Physical store is no longer enough. Retailers need to go global, and keep up with the pace of innovation, with local commerce and mobile commerce. [Greg's comment: who can argue with this? But he isn't talking at all about small sellers or individuals, who are far down the list of eBay's priorities.]

Three strong cores, and our platform. Two core businesses are PayPal and eBay Marketplace. In last quarter, Qsi. Building a platform that others can build off of.

PayPal: Results speak for themselves. $92B in 2010, will crack $100B this year. PayPal is growing; 16% in active accounts. Frequency of use is growing as well, he says. Greg's comment: He is going on quite a bit about PayPal. Does PayPal stand to do better than eBay in the new mobile commerce world?

Adjacent opportunities for PayPal: Digital goods, mobile payments, point of sale. Mobile: people are using their mobile devices to buy and pay. PayPal's mobile volume is exploding.

Digital goods: Allows consumers to pay with one click for buying digital goods such as subscriptions or online games. "Our pricing is lower, the lowest in the industry, for digital publishers."



He predicts that PayPal's digital wallet will be more present and more important than the physical wallet is now. [Greg's comment: What will assume the role of a digital purse?]

eBay's business "fantastic." 90 million users. "We've been going through a lot of change in the last three years, because ecommerce moves and evolves."



Three years ago, consumers were choosing auction format; now more and more sellers and buyers are using the fixed-price format. [Greg's comment: Is that really the choice of buyers and sellers or because eBay has pushed them in that direction?]

Tailoring the eBay experience category by category: how you shop for clothing is different than how you shop for a computer. Encourages people to look at eBay Fashion, with its visual search capabilities. StubHub is a great example of a "tailored shoppng experience," he says. Also calls attention to the "Instant Sale" feature.



eBay did over $2 million of mobile commerce; that will double to $4 million this year. More and more people are using their mobile devices to sell.

[Greg's comment: Hm, it does seem like he has less to say about eBay than about PayPal]

Third leg: we just announced our intent to add GSI Commerce for Web stores and fulfillment. "What these retailers are looking for is a partner to help them to succeed in the mobile commerce environment. We are an ecommerce partner to them."




Questions and Answers

Q. Early in 2010, I got a couple emails per day from politicians wanting money. Have you set up a political contribution thing on PayPal? That could all be automatedj.

A. Scott Thompson: the answer is yes. The ability to donate using PayPal for most major political campaigns is already available. One demonstration was Meg's [former eBay CEO Meg Whitman] campaign for governor, where for a while the only way to contribute was through PayPal's Donate Now button.

Q. Shareholder proposal passing: did you lobby the major investors to vote in your side? Did you talk to ISS risk metrics about this issue?

A. Bob Swan CFO: As you know in our proxy we had five separate proposals, and we educated shareholders and walked them through each one We educated ISS on all five, and the Chevedden proposal as well. We're disappointed that we did not win that proposal and the governance committee will look at steps to take to make sure we remain on top of the list of corporate governance.

No more questions.

[Greg's Comment: Wow, eBay was actually "disappointed" by the way one vote came out - how about that? Over and out.]




Comments (12) | Permalink

Readers Comments

Live Blogging eBay's 2011 Shareholder Meeting   Live Blogging eBay's 2011 Shareholder Meeting

This user has validated their user name. by: Anonymous Annie

Thu Apr 28 11:50:50 2011

''What these retailers are looking for is a partner to help them to succeed in the mobile commerce environment.''

Annie's Question: Did ''these retailers'' actually have a choice in the matter? Is that *really* what they want? Or were GSI's existing customers simply included as part of the deal, and now JD trying to frame the deal as if each of GSI's customers wanted eBay. (Nonsense!)

--------------
PS: Thanks for your work Mr. Holden... it's a good read.

Live Blogging eBay's 2011 Shareholder Meeting   Live Blogging eBay's 2011 Shareholder Meeting

by: John

Thu Apr 28 13:05:03 2011

Q. Early in 2010, I got a couple emails per day from politicians wanting money. Have you set up a political contribution thing on PayPal? That could all be automatedj.

A. Scott Thompson: the answer is yes. The ability to donate using PayPal for most major political campaigns is already available. One demonstration was Meg's [former eBay CEO Meg Whitman] campaign for governor, where for a while the only way to contribute was through PayPal's Donate Now button. .......How about for buying stocks....

Live Blogging eBay's 2011 Shareholder Meeting   Live Blogging eBay's 2011 Shareholder Meeting

by: TwoTen

Thu Apr 28 14:31:49 2011

Management-opposed shareholder proposal passes this morning at the EBAY annual meeting with at least a 63%-vote of support.

Proposal 5
Stockholder Proposal Regarding Supermajority Stockholder Voting Standards

Live Blogging eBay's 2011 Shareholder Meeting   Live Blogging eBay's 2011 Shareholder Meeting

by: Scott Thompson Seedless Grapes
Web Site

Thu Apr 28 16:42:34 2011

We had to rethink allowing political contributions being made through PayPal.

After Meg Whitman blew out in her California gubernatorial race we had to pay over two million dollars worth of SNAD claims under our Purchase Protection Plan.

In retrospect, we should have placed a hold on all of those contributions until after the final returns were in.

That's what we will do on Mitt Romney contributions if he ever gets politically airborne again.

Live Blogging eBay's 2011 Shareholder Meeting   Live Blogging eBay's 2011 Shareholder Meeting

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

Thu Apr 28 17:11:33 2011

Can’t fault any of Greg Holden’s side comments.

We all understand that there is little mention of the core eBay Marketplace because the eBay Marketplace is in reality going down the toilet so fast eBay executives are in a permanent state of spin and becoming more giddy by the minute. Anyone who believes absolutely anything that gurgles forth from the tracheas of this farmyard of headless turkeys is simply naïve in the extreme, and in that group I include the vast majority of Wall Street analysts and pathetic journalist-regurgitators.

PayPal—The Ultimate Savior.

I have no doubt that if and when the retail banks decide they want to take the final step (and probably the increased risk and therefore the extra work involved) and offer a simpler online payments process also based upon their customers’ unique email address identifier, similar to that which PayPal offers, to the many merchants who may otherwise not want (or may not qualify for) a credit card merchant account, and the participating banks offer that service in their usual professional manner via the likes of their partners Visa/Mastercard, the clunky, unprofessional PayPal—outside of eBay—will undoubtedly quickly disappear into the history books—there is simply nothing surer than the sun will rise in the morning.

PayPal at POS.

Unless PayPal issues every PayPal user with a swipeable credit/debit card—in reality a (GE Money Bank—ugh!) Mastercard—PayPal simply cannot compete with the retail banks’ “cards” at POS. PayPal is otherwise as clumsy at POS as “card” transactions presently are relatively clumsy at online transactions. PayPal’s only advantage is its connection to the now sickly eBay and its use of the unique email address identifier which very well suits online transactions only. Regardless, why would anyone want to leave funds idle in a PayPal account so that they could use PayPal at POS? Why would any off-line merchant risk providing goods/services and then have to wait possibly weeks/months before actually being able to get their funds from the “no responsibility accepted” PayPal process? Think about it for a moment: Frightening. Then there is always the burning question, how can PayPal manage the credit/transaction risk without knowing the user the way a the retail bankers, at each end of the transaction, know their customers? The Chief Headless Turkey is seriously delusional if he truly thinks that PayPal, outside of the eBay Marketplace, will be eBay’s savior in the long term.

Enron / eBay / PayPal / Donahoe: Dead Men Walking.

Live Blogging eBay's 2011 Shareholder Meeting   Live Blogging eBay's 2011 Shareholder Meeting

by: Joe Average

Fri Apr 29 02:32:47 2011

Thank-you for mentioning Skype. A helpful reminder of another useless, uncompetitive eBay has-been.

Live Blogging eBay's 2011 Shareholder Meeting   Live Blogging eBay's 2011 Shareholder Meeting

This user has validated their user name. by: Bijoux Dragon
Web Site

Fri Apr 29 06:47:41 2011

Thank you for an excellent report!  I cringe at the focus on digital wallets used on mobile devices.  In rural areas cell service is less than prime, one could say spotty at best.  Also, will their digital wallet be any better at protecting merchants?

B&M merchants represent a gigantanormous group that eBay has yet to screw over but, screw them over it will.  It's in their nature to do so!

Live Blogging eBay's 2011 Shareholder Meeting   Live Blogging eBay's 2011 Shareholder Meeting

by: chaz This user has validated their user name.

Fri Apr 29 14:15:27 2011

Ebay can't be faulted for going after the fixed price marketplace, but auctions are still a huge business and some items are traditionally sold by auction.  Collectibles and used items are often sold by auction, even at local estate sales, rather than fixed price.  New CD's, and other generic retail items probably sell mostly at fixed price.  

Live Blogging eBay's 2011 Shareholder Meeting   Live Blogging eBay's 2011 Shareholder Meeting

by: Digby

Fri Apr 29 14:37:50 2011

@Chaz
I agree with you about some items suiting auctions.
But don't forget that ecrater and bonanza both do used and collectibles and they don't do auctions and they are both growing steadily.
ebid.net does BIN and auctions, and its auction sales are nowhere near as big as their BIN sales ?

Live Blogging eBay's 2011 Shareholder Meeting   Live Blogging eBay's 2011 Shareholder Meeting

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

Fri Apr 29 19:31:51 2011

"GSI 1Q loss deepens before acquisition by EBay"

http://www.businessweek.com/ap/financialnews/D9MSVN180.htm

Another great buy by the eBafia Don.

Enron / eBay / PayPal / Donahoe: Dead Men Walking.

Live Blogging eBay's 2011 Shareholder Meeting   Live Blogging eBay's 2011 Shareholder Meeting

by: nadine

Sat Apr 30 01:25:41 2011

"Tailored Shopping Experience" seems to be the buzzword of the month. Can anybody tell me what it means?

Live Blogging eBay's 2011 Shareholder Meeting   Live Blogging eBay's 2011 Shareholder Meeting

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

Sat Apr 30 01:38:38 2011

"Tailored shopping experience:"

occurs when ebay places a cookie on your computer without your knowledge or authorization that contains and gathers not only tracking information for all your internet shopping, but also includes the type of items you typically buy and the typical amount of money you spend.

They then assume that the kinds of things you've looked at and/or purchased in the past is the same type of item and quality level that you want to see now.

Next they show you only those items they want you to see based on the data they've collecting about you surreptitiously.

Most of the things they're going to allow you to see will be direct from Chinese sellers or their pet Diamond seller who sell mostly Chinese made stuff or the designer-du-jour.

He should call it the guided shopping experience because you won't be seeing anything ebay doesn't want you to see unless you select Recently Listed or Ending Soon in search.



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