Ina Steiner EcommerceBytes Blog
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by Ina Steiner, Editor of EcommerceBytes.com
Sun July 1 2012 13:27:19

CEO Counts on Disruptive Mindset to Reinvent eBay

By: Ina Steiner

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eBay's John Donahoe is leaving former CEO Meg Whitman's vision behind as he chases innovation in the ecommerce space, he told Fast Company magazine in an interview titled, "How Jack Abraham Is Reinventing Ebay." However, it's a good bet that most eBay sellers don't know who Jack Abraham is and that his company, Milo, is part of Donahoe's vision for the success of eBay.

What Is Milo?
When the 25-year old Abraham was in college, eBay actually shut down is first venture, which he told EcommerceBytes Contributing Editor Greg Holden in 2010 was an "eBay arbitrage" business. His software would find all the instances of a product, like an Xbox 360, that were up for sale on eBay. "It would buy the product at a cheap price, relist it, and sell it for a higher price," he explained.

He went on to launch Milo while attending business school. Milo shows online and mobile searchers inventory from local retail stores (though for the most part it picks up inventory data from national chains rather than small independent retailers), displaying availability and cost. By the end of 2010, eBay acquired Milo as Google began integrating local inventory data into its shopping engine.



eBay's Vision
Donahoe told Fast Company that the increased acceptance and use of mobile devices was blurring the lines between online and offline commerce. His goal is simple: He wants to put eBay at the center of this new hybrid online/offline shopping experience.

"So like a rich kid trying to buy his way to cool," Fast Company wrote, "Donahoe ordered his leadership team to snap up the best innovations and talent in the market." Milo was one of those acquisitions.
 
Monetization - Don't Worry, Be Happy
But how do you monetize a transaction made at a local retailer instead of on eBay? Apparently through PayPal, in part. Fast Company wrote, "Every time anyone would make an online purchase through eBay's presumably seamless cross-channel network, PayPal would grab a cut of the transaction. When eBay drives traffic to a store, it would earn a referral fee."

But how specifically will eBay profit from cross-channel shopping? Donahoe: "We're not worried about profits, in my mind."

The Challenges
Milo has a challenge in adding small local retailers, and in providing good search results. eBay's image is another challenge, according to Forrester analyst Brian Walker, who told Fast Company, "even if all of eBay's acquisitions sync up flawlessly, consumer perception will still be difficult to shake."

And can eBay's corporate culture succeed at taking its small innovate acquisitions and leveraging them in its business? Square COO Keith Rabois told Fast Company that eBay "has been awful at inculcating entrepreneurial talent."

Traditional Small Sellers Not Part of eBay's Vision
Many longtime eBay sellers are convinced eBay is turning its back on them. A seller who read the Fast Company article wrote to EcommerceBytes, "It has some VERY interesting comments from John Donahoe and the rest of his team on what they want eBay to be, and small, auction using sellers aren't part of it."

A Fast Company reader commented, "Amazon are killing eBay, they've attracted mid-range vendors and are far better positioned to exploit "cross-channel-shopping" than eBay ever will be. eBay should be focusing on what provided its rise to prominence, as they've seemingly forgot. Providing a platform to allow consumers to sell to consumers, duh."

Fast Company said Donahoe is relying on the twenty something-year-old Abraham to help steer eBay to the future of retail. ""I don't pretend to be a visionary," the CEO admits. "Jack sees a future that others don't. He just has a disruptive mind-set of what he wants to do and absolute clarity on it." As he speaks, Donahoe affectionately slaps Abraham's thigh and shoulder at least a dozen times, showing off his MVP."

Will innovation and a disruptive mind-set help rejuvenate eBay and compete with Amazon? If you were the CEO of eBay, what would your vision be for the future of the company?
 




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Perminate Link for CEO Counts on Disruptive Mindset to Reinvent eBay   CEO Counts on Disruptive Mindset to Reinvent eBay

by: mylifeisgood This user has validated their user name.

Sun Jul 1 14:55:59 2012

Most CEO's get great delight in seeing their users with disruptive mine-sets. Donahoe has succeeded in that vision.

IE DSR's, TRS, One sided feedback, Dangling Carrots.

What people don't understand is its the CEO's to make stockholders and wall street happen. Those people don't care if the sellers are happy or not. Its just not in their mind-set to make sellers happy.  

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This user has validated their user name. by: Ric

Sun Jul 1 15:02:13 2012

If John Donahoe were a hockey player, he would be the worst thing to hit the ice since the Titanic.

The so called disruptive innovations John Donahoe has brought to eBay are not innovations, they are merely disruptions of what was once a simple and well oiled machine that have yet to prove themselves successful. In most cases these changes are merely cosmetic makeovers created by individuals who's experience with eBay is limited to collecting hyper inflated paychecks.

John Donahoe's compensation is based largely on eBay's GMV (Gross Merchandise Value) which he has manipulated repeatedly to conceal the fact that he has failed to generate and significant transactional growth in eBay's marketplace.

Under John Donahoe, eBay has failed to solve the non paying bidder issue and essentially tolerates increasing numbers of non paying bidders. This is largely due to the fact that every item that closes with bids counts toward eBay's GMV - even if the item is never paid for.

Under John Donahoe, eBay has been relentless with regard to forcing sellers to offer free shipping. This was done gradually to conceal the decline in transactional volume resulting from unsuccessful marketplace changes. Forcing sellers into free shipping endables eBay to count shipping costs as part of the sale price of an item thus artificially inflating eBay's GMV. When large numbers of sellers still resisted to help eBay obfuscate their transactional growth, Mr Donahoe simply ordered that a Final Value Fee be imposed on those items which still did not include shipping as part of the selling price.

Under John Donahoe, eBay has forced sellers to accept returns under an extremely liberal return policy propped up by a so called Buyer Protection Plan. This was not done to benefit buyers or protect buyers from unscrupulous sellers. It was done because John Donahoe realized that most items returned are re listed on eBay thus generating more fee revenue and contributing again to eBay's GMV with the second sale.

It should be noted that returns reduce seller revenue but do not count against or in any way reduce eBay's GMV. eBay will increase GMV as many times as the same item is sold, but returns are simply not recorded or accounted for on eBay's books.

Under John Donahoe, eBay has all but closed PayPal shipping and attempted to force sellers to purchase all shipping labels through the eBay system instead. New Postal services were added to eBay but remained unavailable through PayPal again to force sellers to process through eBay in order to take advantage of Priority Mail Regional Rates and certain other new USPS offerings. John Donahoe could not resist shifting the revenue earned from processing shipping labels off of PayPal's books and move it over to eBay. This was done without any public announcement because John Donahoe did not want Wall Street analysts to see the revenue slight of hand that he engineered to make eBay's profitability seem better.

I could go on, but these items illustrate the point well enough.

The con is ongoing and Wall Street continues to ignore the fact that smoke and mirrors are the primary tools that have been employed by John Donahoe.

John Donahoe may have an MBA.... Little did anyone realize that MBA stands for Manipulative Bullship Artist.

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by: Charlie B This user has validated their user name.

Sun Jul 1 15:02:52 2012

Donahoe will soon be slapping his own forehead instead of Abraham's thigh as eBay continues to crater. Doh!

P.S. Anyone else think it's creepy that Donahoe ''affectionately slaps Abraham's thigh and shoulder at least a dozen times''?  

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This user has validated their user name. by: Philip Cohen
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Sun Jul 1 16:34:56 2012

“But how do you monetize a transaction made at a local retailer instead of on eBay? Apparently through PayPal,”—LOL

The fact is, the eBay Marketplace has become moribund since Donahoe took the helm five years ago, and it is continuing to atrophy; and Donahoe’s delusion that the clunky, unscrupulous middleman, PreyPal, now has any real future outside of its effectively mandated place on the eBay Marketplace is simply laughable; Donahoe is a fool …

Seriously, has not this headless turkey yet done enough damage to eBay with his MBA “destructive renovations”?

eBay / PayPal / Donahoe: Dead Men Walking

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by: Digmen1 This user has validated their user name.
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Sun Jul 1 16:40:02 2012

You have to hand it to JD.
He was right about mobile a few years ago, as it is now entering the bricks and mortar area.
JD makes more money each year for himself.
And ebay carry on with his plans.
So any small seller or auction seller on ebay needs to think "Do I really want to be part of this?"
There is no point in trying to turn it round, until it fails, which it will as ebay cannot compete with Amazon and all the large bricks and mortar companies that have their own websites and the 200,000 stand alone websites.
In the meantime ebid.net added 100,000 new listings yesterday.

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by: pace306 This user has validated their user name.

Sun Jul 1 16:50:41 2012

Its quite obvious that Danielle Sacks knows nothing about eBay, and her research data was obtained from an eBay corporate interview with some eBay figurehead then with sellers past or present.

The article reads well, but is incorrect on so many points its not funny.

No one knows or cares about Jack the Wack or Milo. He may be a boy genius whos program was snapped up by eBay with my FVF's, but its gone no where but Danielle doesnt know that.

The ONLY people who do any kind of local sales with eBay getting a cut are the people eBay already give special deals too - so it accomplishes nothing. Actually, all it does is let those retailers USE EBAY to get customers. eBay does the work, they get the sale. Paypal may get thier %2 vig once - but after the first sale, the customer is THIERS!

''asked to name eBay's biggest competitor, he replies: ''Innovation.'''' ... NO, YOUR BIGGEST COMPETITOR IS AMAZON. You know it, its why your speaches at CES were NO PRESS ALLOWED, and why you keep Noah Hershmann (ex Amazon) around. He (your pet bulldog)is helping you become Amazon - just backassward.

''Once a retail pioneer, eBay had devolved into an auction wasteland with outdated technology.'' Yes eBay was ONCE a retail pioneer, but it wasnt auctions that killed it. It was eBay concerning themselves more with FVF's then honesty and integrity. I gave up on buying from auctions when eBay looked the other way on shill bidding, sniping programs, and made sellers terms impossible. Besided the cool stuff dissapearing, sellers did as well.

''Competitors such as Amazon were beating it at its own game.'' Simply because they were honest, the playing field was level, and policy terms werent used to punnish - they were carrots - but in eBayland they were always sticks. They were called carrots - but we all knew better. IF it walks like a duck and quacks like one - it is one.

eBay, instead of learing from thier own trials and tribulations (ie being sued by Vitton) decided (as usual) to turn that lesson 180 degrees - and encourage manufactorers to harrass and threaten sellers. Instead of applying the lessons they learned from being sued - they ignored it all and went full bore against sellers - for no reason. VERO morphed into leg breakers instead of upholders of the law. NO ONE likes a corrupt cop.

''We were not a technology-driven company.'' ... no they are a broken company looking for a future and a place to be on the net.

Neither sellers NOR buyers have anything good to say about eBay - and its no wonder - they just never do the right thing - EVER. Funny, no one says that about Sears, or Buy.com, or Amazon!

Over Donahoe's tenure, the company's stock has been essentially flat. While revenues are up and may hit $10 billion this year, profits are flat. And the image of the company remains obscure, faded, and, yes, flat. When discussions turn to the great tech companies of today and the future, this onetime Internet giant is an afterthought. <<<---- EXACTLY - and JD is the reason why!

As he speaks, Donahoe affectionately slaps Abraham's thigh and shoulder at least a dozen times, showing off his MVP. <<<--- good thing Obama said this kind of stuff is now legal !

NO ONE trusts either eBay or Paypal, so his plan will fall FLAT on its @$$. Paypal keep trying retail roll outs but none go so well. eBay keeps tightening the rules on small sellers and they end up leaving - along with customers.

eBay transformed itself from being your landlord into being your unannounced business partner - one that no one wants!

Donahoe wants to make eBay the first place a consumer goes every time she shops <<<< --- not gonna happen - no one trusts eBay or Paypal.

eBay WILL succeed with GSI commerce - as they own it - and as we all know - eBays special partners dont have to play by the same rules everyone else does!

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

Sun Jul 1 17:16:08 2012

@digman1,

I hope that you are not referring to PreyPal when you say JD was right about mobile; PreyPal “mobile” is going nowhere; next time you are in Home Depot, ask a cashier how PreyPal is going at their point-of-sale—LOL

Regrettably, the faux journalists of today appear to rely solely on the media release nonsense that emanates from the likes of the eBay Dept of Spin, and you can probably safely believe the exact opposite of what they say.

Which invites the question, how can you tell when an eBay spokesperson is lying to you? Their lips are moving ...

But, I particularly enjoyed a recent purchase on eBay that was fulfilled by Amazon! I doubt very much if the reverse will ever be the case …

eBay / PayPal / Donahoe: Dead Men Walking

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by: Digmen1 This user has validated their user name.
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Sun Jul 1 18:52:28 2012

@Philip Cohen
No I did not mean Paypal getting into b&m sales terminals, I meant the fact that smart phones are now everywhere, and younger people seem to be using them to check out prices and buy things.
I watch what my daughter does.
As an older person I will always shave a desktop.
Younger people will soon be able to without a laptop as a smart phone has lots of power.
I note that Amazon is well ahead of ebay on the Alexa ratings.


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

Sun Jul 1 19:02:44 2012

My problem with "smart" phones is that while people are constantly playing with them they are not doing any work ...

I agree, give me a desk top anyday for such activities; I like to actually understand and be careful about what I am doing ...

Which brings me to the nonsense known as facebook. Do you realise that they are harvesting your private email contact list information?

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by: Digmen1 This user has validated their user name.
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Sun Jul 1 19:21:54 2012

@Philip
You are obviously a bit of a Luddite.

I use Facebook and Pinterest.
They are not harvesting my email contact list as I don't have one.

I watch young people and they are on Facebook, not ebay and not emails.

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by: mylifeisgood This user has validated their user name.

Sun Jul 1 19:22:43 2012

Donahoe is definately succeeding in creating a disruptive mindset to the sellers on Ebay.

Until wallstreet, stockholders believe anything but the figures and the CEO's Donahoe will continue with the mindset.

And all the sellers will continue to whine and cry. At some point in time the sellers are going to have to either change their business plans or go somewhere else. All this whining for the past 5 years has accomplished nothing for the sellers and I don't see anything postive happening in the near 3-4 years.  

Disruptive Mindset has taken over.

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

Sun Jul 1 19:47:29 2012

@Digmen1,

As far as facebook is concerned I certainly am a Luddite ...

You use a computer but you don't have an email client contact list? Interesting ...

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This user has validated their user name. by: Spartacus

Mon Jul 2 01:48:05 2012

@Digmen1 - Facebook and Pinterest? You're obviously a female, mid-30's to 40's. WAHM cougar thingie that finds your place in life by being behind the technology of your teenage ''daughter'', etc.. More of a follower than a leader yet when you disagree with someone on a interwebs forum, your maternal instinct kicks in and you launch yourself full bore at anybody who disagrees with anything you say.

Yeah, I know the type. eBay discussion forums used to be full of people like you until eBay started getting rid of the troublemakers who would buy stuff and leave negs just because somebody offended them in the forums.

Yeah, bet you're that type. Please stay to the WAHM sites like Facebook, Pinterest, Etsy, Bonanza and Yardsellr. Lord knows people not unlike yourself have ample hours in the day to build up 37,000 posts on a forum in on year.

Sad part is, nobody who really matters listens to what you have to say anyway.  

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This user has validated their user name. by: TrentDep

Mon Jul 2 03:12:04 2012

@ Spartacus...

Whoaaa... What is going on with that killer?...Relax.

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This user has validated their user name. by: TrentDep

Mon Jul 2 03:13:43 2012

"As he speaks, Donahoe affectionately slaps Abraham's thigh and shoulder at least a dozen times, showing off his MVP.""

Ewwww!

OK - I'm sorry, but...  That is just some kind of creepy...

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by: eBelly This user has validated their user name.

Mon Jul 2 03:19:01 2012

Well there you have it sellers. Your demise all spelled out by little Johnny D. who doesn't need you anymore. He's slappin' his new race horse on the back to jump right over you all. He's got smart phone apps now and there's no need for any of the types of sellers who built feeBay's success. If you're a seller, you should just go away to some other venue; or BETTER YET, harvest every G'dm email address you've ever received on a PP payment and take your market back with direct email marketing. Johnny has you all locked up in a dismal state of paralysis, the vents have been sealed, there's no source of sustenance, and the oxygen is slowly being used up. Seller revenue asphyxiation is a slow and painful way to watch your business die, so why in hell are you still wasting your time on feeBay? Save your businesses and your sanity and ESCAPE NOW. Johnny probably can't believe any of you are still dumb enough to keep clinging to the hope that it will get better.

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This user has validated their user name. by: Ed Gadfly
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Mon Jul 2 07:50:42 2012

The ''fastcompany.com'' article is a rewrite of a 2011 article.

What was rewritten? It does not say.

They should have re-shot the pictures. What guy doesn't enjoy a pink shirt or a sweater vest?

(Note to self: work on your gaze. Look ''bad,'' like you could kill a robot or space alien in a movie.)

So Milo is about ''search'' right? And eBa'al gets a tiny little 2% cut?

Getting a little woozy here... must be the nauseous waves of deja vu...

NO - NOT DEJA VU, MEMORY. Takes me back to the time when I could sell things on the interweb by posting items on a website and giving them a 3% cut.

Beware brick and mortar merchants! Today you are ranked for location and product availability, but how long will that last?

Maybe a DSR concept for brick & mortars, a three tier pricing system and a ''best match'' feature for search would make a ''well enough'' system better.  

It looks like a variation of a theme.

They should launch it as another branch, like eBay Motors or StubHub.

Call it Yabe and stick to the party line.

''We are not eBay - we are Yabe.''

''People are basically guli--- good, basically good.''

''A fair and bias--, balanced, balanced playing field!''

Ah, if you say it long enough people will believe it.

The Yabe name won't bring up all the eBay complaints, which is another company anyway, run a couple of blocks away and staffed by the crack team from eBa'al.

It's like comparing apples to malus domestica.  

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

Mon Jul 2 09:42:22 2012

I can't help it. I know it *says* "Jack Abraham"... but as I'm reading along, my eyes see the text as "Jack Abramoff" (and the little narrating voice in my head says "Jack Abramoff" as well.)

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This user has validated their user name. by: Rexford

Mon Jul 2 11:02:35 2012

The article doesn't mention that simultaneously, Donahoe has become the most hated CEO in the industry.

Any fool knows you don't bite the and that feeds you.

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by: RCL This user has validated their user name.

Mon Jul 2 11:15:10 2012

Spartacus, go back to bed, and try again--you aren't fit for humans today.

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