Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed July 2 2014 16:52:02

Wall Street Estimates Impact of eBay Security Breach

By: Ina Steiner

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It isn't so much the security breach we've heard so much about that directly impacts eBay sales, but rather, fallout from its public announcement about the cyber attack on May 21st. Individual sellers can see how it is impacting their own sales, but Wall Street analysts are trying to estimate how exactly it is impacting eBay's bottom line.

Negative media attention about the breach likely gave some shoppers pause before logging in to shop, and adding to the potential for stopping shoppers in their tracks is eBay's "password reset" requirement. After revealing that criminals had accessed its user database, eBay required all members to reset their passwords before they could sign in.

In a new report out today, analyst Bob Peck of Suntrust said the full impact of the password reset could take several quarters to play out. He wrote, "We suspect the impact from the password reset to again be in the low-single digits (again some commensurate impact to PayPal),... We also again expect some incremental expense."



Peck makes some interesting points - he believes the password reset is most likely to disrupt "casual" uses of eBay. He thinks regular users will tolerate the added friction of the password reset. And, he says, new users would go through an authentication process anyway. Interestingly, he doesn't directly address the impact of any lingering concerns members (or new users) may have over eBay's security.

Last week we explained how Colin Sebastian of Robert W. Baird & Co. viewed the impact of the breach, including a graph showing the rolling 4-week growth of eBay Gross Merchandise Volume.

EcommerceBytes readers reported on the impact of the breach on their sales in a survey, with 91 percent reporting that sales remained lower than pre-breach announcement levels.

This week, we learned that "tens of millions" of eBay buyers and sellers have reset their passwords. Whether eBay will provide details when it announces second-quarter earnings later this month is not known, but it appears analysts are quite interested in knowing more.




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Readers Comments

Perminate Link for Wall Street Estimates Impact of eBay Security Breach   Wall Street Estimates Impact of eBay Security Breach

by: Ogri This user has validated their user name.

Wed Jul 2 17:55:03 2014

If I was ebay would make the lost transactions due to hack numbers as high as possible, without scaring Wall Street too much.  The hack is a publicly acknowledged problem that is now (possibly) being fixed.

That would allow burying of the problems that aren't publicly admitted; such as search being a mess, and potential problems when defect system comes into use.

Then have a couple of quarters breathing space to try and fix the other problems.

A 'good day to bury bad news'.

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This user has validated their user name. by: The End

Wed Jul 2 19:44:09 2014

Go to : www.ebay.com
Up in the web address window, left click on the little Globe to the left of the "www".
You will see the statement "Your connection to this website is not encrypted".
Ebay is Not at all conducting itself in a professional manner, and this is the proof. Ebay can no longer talk about being on the cutting edge of anything. It is in the stone age as far as website security goes.
This is EXACTLY why checks and Postal Money orders are the PREFERRED and the Most SECURE payment methods.
When all is said and done, ANALOG WINS OUT OVER DIGITAL always, in all ways, every time, and forever.  

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This user has validated their user name. by: David Steiner

Wed Jul 2 19:50:55 2014

If you go to www.amazon.com and click on the icon, you'll get that same message. However, if you are on either site, and about to enter a transaction, that page will be secure.

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This user has validated their user name. by: The End

Wed Jul 2 19:59:43 2014

This is true David.
But Ebay has the distinction of being targeted by cyber criminals.
To secure Ebay's website requires the extraordinary steps to put Every Single Page in the ENTIRE Site under the EV-SSL umbrella. This can only be accomplished by removing ALL links to outside websites. The EV-SSL Green Bar must display on absolutely All pages. No Exeptions. No Green Bar = SECURITY HOLE.
Ebay can no longer afford to conduct itself in a "business as usual" fashion.

Perminate Link for Wall Street Estimates Impact of eBay Security Breach   Wall Street Estimates Impact of eBay Security Breach

This user has validated their user name. by: Ric

Wed Jul 2 23:24:46 2014

I know of one regular eBay buyer who has not changed their password, and has no intentions of returning to eBay. Their business is computer security, and they have no desire to trust eBay again after the hack.

As a regular customer, they contacted me 3 weeks ago to provide me with their direct email address. The buyer asked that when I have merchandise that matches their previous purchases to contact them directly.

So, this week I came upon an lot of items they regularly purchased from me. I sent off an email and an hour later I had a reply.

The buyer wants me to invoice him directly through PayPal after the holiday weekend.  

I will pocket $500.00 for the purchase without listing on eBay, so no final value fees to pay, no micromanagement of the deal, no defect worries and, best of all,  eBay will lose the GMV of a transaction which would have otherwise have taken place through the site.

I wonder if any other sellers have had this kind of reaction from regular buyers since the hack?


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by: donald This user has validated their user name.

Wed Jul 2 23:35:18 2014



All I know is that may eBay sales has diminish tremendously. My Amazon hasn't ...

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This user has validated their user name. by: Philip Cohen
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Wed Jul 2 23:55:28 2014

@Ric, if your customer pays you via "PreyPal" you are still at some risk ...

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

Thu Jul 3 01:37:41 2014

What wall Street should be looking at is the much bigger picture.

The Hack represents only one reason why ebay is in trouble.

They won't, of course, because fact finding is hard and sipping corporate pablum is easy.

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by: NetWatch This user has validated their user name.
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Thu Jul 3 06:58:57 2014

@Ming, there are some ripples beginning, however. Deception, malfeasance, fraud, unfair trade practices, etc., are difficult to keep concealed forever.

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This user has validated their user name. by: Ric

Thu Jul 3 07:32:45 2014

@ Phillip

I have no concern with this customer having dealt with them across multiple transactions without even a hint of a problem.

In fact, where transactions with this buyer are concerned, jumping through all the eBay hoops is a bigger complication than anything the buyer has presented.

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by: ebay refugee camp This user has validated their user name.

Thu Jul 3 07:56:24 2014

First of all wall street is responsible for what is wrong at ebay. Stock brokers like JD are making POOR decisions at ebay.
I know my sales were way down afterwards and my items are seasonal at that and this time of year, so it hurt my bottom line.
They are coming back but not to where it should be.
My sales on other venues are up and I am quite pleased about that.
My concern is the fall release where small business will victimized by ebay's ill conceived TRS policies, if this is allowed to go through as planned it will impact ebay negatively because sellers will leave.
Ebay is going for large retailers so they can make ebay a shopping mall and use their warehouses to fulfill orders.
They are purposely trying to drive off small sellers.
We can leave or stay that is up to JD, my position is this every small business should put their ebay store on vacation on August 19th. List your items on other venues now, get a website now and prepare yourself for the new attack on the small retailers by Wall Street executives at ebay.
CLOSE YOUR EBAY STORES ON AUGUST 19TH.

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by: rhawk This user has validated their user name.

Thu Jul 3 08:14:50 2014

Its not just the hack, but is MORE the fact that google busted ebays traffic by up to 1/2 in some instances.   Nobody is talking about that though.....

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This user has validated their user name. by: Ric

Thu Jul 3 13:14:33 2014

eBay's demotion in Google search is getting plenty of discussion. There have been several discussions here and on eBay's discussion boards as well.

I believe Wall Street is correct to downplay eBay's demotion in Google search simply because it is eBay's job to attract buyers - that is inherent in being a marketplace.

Wall Street does not need to write the excuses for eBay, although though they accept just about any excuse or creatively written justification eBay spews in their quarterly reports.

eBay's Q2 2014 report will be interesting.

How will JD prop up the sales numbers?
Will he clarify or even mention details surrounding the hack?
Will he use the Google demotion as a crutch to justify flat sales?
How much did the $20.00 coupon cost eBay and how much of a hit will earnings take as a result of having to bribe buyers to make purchases?
Will he lower earnings expectations for the rest of the year?
Will he admit that Q3 will be difficult due to the hack, the demotion, and the start of new TRS requirements?

Going to be a great story time when JD reports to his Wall Street masters.

I bought extra popcorn for the event.

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by: Santini This user has validated their user name.

Thu Jul 3 13:34:10 2014

I'm still curious to find out why ebay repatriated those billions at great tax expense rather than just borrowing against their foreign holdings, as is standard operating procedure in most instances.

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by: little shop This user has validated their user name.
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Thu Jul 3 13:45:35 2014

If many folks are that afraid now to buy your merchandise from EBAY, because of the security breach, then try these real-time online auction sites to sell your merchandise.  The newest on, much like Tophatter but not affiliated with them, just started up. Go ther and give it a try.  

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

Thu Jul 3 14:26:32 2014

Santini asks

"'m still curious to find out why ebay repatriated those billions at great tax expense rather than just borrowing against their foreign holdings..."

Maybe because what The Ho needed the money for wasn't considered a lending good risk.

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by: OnceuponaTime This user has validated their user name.

Thu Jul 3 16:16:46 2014

''The End'' is correct I remember in years past when ebay would inform their users to be careful what sites they visit because of the potential virus issue.

I remember getting trojans off the ebay site when visiting 3 different sellers on 3 separate occasions. Back in the early 2000's. My guess is these sellers got infected and passed it along.

Unless ebay encrypts their user database along with their advertisers, you can be susceptible to getting nailed if you search the site.

I would think the same applies to any site that allows an
un-encrypted search of their users either as sellers or bloggers, or potential website advertisements etc etc.

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This user has validated their user name. by: Philip Cohen
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Thu Jul 3 18:09:35 2014

Wall Street is not propping up eBay, just the opposite ...

Notwithstanding that the eBay Dept of Spin likes to proclaim a “400% increase” in eBay’s stock price since its ~$10 low during 2008–2012 global recession, the fact is, in August 2007, immediately prior to the start of the GFC, when the "Pain From Bain", Johnny Ho, was already effectively in control of eBay, the share prices of eBay and Amazon were both ~$40. With eBay recently <$50 and Amazon >$300, clearly, the “smart money” on Wall Street recognises eBay to be a "dog", and Johnny Ho to be a very poor dog handler; relatively speaking, all eBay’s “long” stockholders (including Pierre Omidyar) have been going backwards ever since Johnny Ho took the helm ...

eBay Inc, where the incompetent mingle with the malevolent and the criminal, and the just plain stupid ... http://bit.ly/11F2eas

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

Fri Jul 4 14:05:55 2014

“An analysis of problems reported to the [UK] Citizens Advice consumer service, between October 2013 and March 2014, about products or services bought through Gumtree and eBay finds:

“1 in 6 (17%) from Gumtree was a scam or potential scam.

“1 in 10 from eBay was a scam or potential scam.”

http://www.citizensadvice.org.uk/index/pressoffice/pre
ss_index/press_20140703.htm


So, what's new?

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This user has validated their user name. by: bitbybit

Sun Jul 6 21:16:14 2014

The only thing holding ebay up is all their criminal actions. Seems that is what is running this country. If you are not FOR it, you must be AGAINST it. Anyone with a moral compass need not apply. Sad this is happening to our once great country.

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