Is it time for an eBay renaissance?

Is it time for an eBay renaissance?

Summary: eBay has quietly been turning around a few analysts skeptical about its prospects. Can eBay be the bridge between online and offline commerce?

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For a company with more $2.3 billion in annual earnings and $9.1 billion in revenue, it has been shockingly fashionable to write off eBay. The common refrain: eBay is losing marketplace share. It's so Web 1.0. And eBay can't hang with Amazon.

However, eBay has quietly been turning around a few analysts on Wall Street and its powwow Wednesday won a few over. Simply put, eBay has some heady goals between now and 2013. Here's the bottom line outlook:

How will eBay get to that revenue goal? PayPal will carry the company.

But eBay CEO John Donahoe's vision goes beyond riding PayPal's coattails. In a chat with analysts, Donahoe said eBay can be a bridge between offline and online commerce. He wants to ditch the "e" in e-commerce. The argument in a nutshell looks like this:

Mobile apps are bringing coupons, checkout, payments and price comparisons to brick and mortar retailers. EBay has some early leadership in mobile apps and has bought companies like Milo, an early shopping tool, and Brands4Friends, a German social shopping site.

eBay's mobile apps are backed by PayPal.

The company aims to sit in the middle of the transaction and shopping experience as it connects buyers, sellers and developers.

If that plan works out, eBay's addressable market balloons.

The big question here is whether folks will buy eBay's master plan. Barclays analyst Douglas Anmuth writes:

eBay’s investor meeting was upbeat and it’s clear that this is a very different company from 2 years ago. PayPal has a long runway for growth and the Marketplaces business has stabilized. Importantly, we believe the culture and execution at eBay has changed as the company is now infused with technology, focused on the customer experience, and is more nimble than in the past.

Others aren't so sure. The skeptics note that eBay's marketplace business is likely to continue to lose share. In other words, eBay hasn't quite turned the corner. Piper Jaffray analyst Gene Munster writes:

The bottom line is we believe eBay's marketplace business will continue to lose share in FY11 and FY12, inhibiting earnings growth for the overall company.

Ultimately shoppers will decide eBay's fate, but Donahoe was convincing in putting a new spin on the auction leader.

Topics: Banking, E-Commerce, Enterprise Software

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13 comments
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  • RE: Is it time for an eBay renaissance?

    My wife used to love using eBay. Now she doesn't. As a consumer, she's been extremely unhappy with how the character of the site has changed so much.

    If I were to describe what she doesn't like, I'd say that it was mostly the transformation from giant garage sale/swap meet to giant strip mall. Basically, the personality of individual sellers has been squelched and the bulk sellers seems to have taken over the site.
    David Gewirtz
    • RE: Is it time for an eBay renaissance?

      @David Gewirtz

      Well said in a few short sentences.
      thofts
    • RE: Is it time for an eBay renaissance?

      eBay an PayPal recent policies have killed the little guy.

      They have been holding funds to sellers for all sorts of reasons, in their effort to "protect buyers". You must have a fairly large number of positive feedback - then meet a minimum monthly of good ratings, or else they may hold the buyers monies to you for weeks - on what they consider "high risk" items - mostly electronics.

      They require you to ship with tracking numbers and only when the item is confirmed delivered, you can call papal to have the funds released. I have had to ship with my own money, then wait nearly 3 weeks to get the money from the buyer.
      I bought a set of ear buds for 50 bucks from a single seller, that had 99% satisfaction, but below the minimum requirement, they held my monies to him. He refused to ship without payment, that process took me over a month to get my money back through arbitration...
      Big sellers that do big numbers don't have those problems.
      It has killed my experience with eBay/PayPal.
      I used to love using eBay - now not at all. Check around their policies are hurting small time buyers and sellers more and more. it's a shame.
      billmcgin@...
    • RE: Is it time for an eBay renaissance?

      @David Gewirtz <br>
      Well said.

      Too often, when we talk about the worst aspects of "big business", discussion is limited to companies such as MS, Google and Apple. eBay/PayPal should definitely form part of such discussions, too!
      Wakemewhentrollsgone
  • RE: Is it time for an eBay renaissance?

    They was they keep pissing off users, they can go ahead and die.

    There are others coming along to fill the void ebay created by grabbing my money every way they could think of.

    They can't die fast enough for me.
    timspublic1@...
    • RE: Is it time for an eBay renaissance?

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      helenass
  • Ebay Issues

    In their quest to get more buyers, they have been attacking the sellers. It is almost impossible to provide negative feedback on a bad buyer, even if they never pay. However, as a seller you are held to task on everything.
    steveschiffer@...
  • RE: Is it time for an eBay renaissance?

    Greetings to readers,
    Firstly I would introduce my self as occasional buyer since 2004 and I have bought not more than 50 items and sell just few in past period also I would like to mention currently eBay vs. PayPal incompatiblities as country where I reside is approved for eBay but not for PayPal. Moreover countries from the regions that are approved for both services except money withdraw through PayPal and that is huge disadvantage for us here in Eastern Europe as most entrepreneurs without everyday job and regular income so far the greatest opportunity, after crisis years and devastation are internet and e-trade as well as communication and contacts worldwide. That is possible with great service on eBay and PayPal.
    Respecting previous comments I must agree that they are projecting profits and acting as web service more or less in the same fashion and with new payment and other companions(although not completely integrated -MoneyBookers, AlertPay etc) and with improved promotion selling discounts and so. But as much as they are getting more organized and technically improved they should not leave out small participants and try to keep that friendly image and user oriented market place. They could offer exchange, multilingual translation interface and phone support. Greetings to all readers here
    PS.Just to invite -I would like to start online trade with exchange service and if anyone interested to work on project or start with this business send private message to office@ovo-ono.co.cc
    Nik381
  • use craigslist

    Shut down my ebay business because paypal put holds on every single transaction even with perfect feedback and never an unhappy customer. It felt good to close the account and tell them I'm using craigslist instead, no more ebay-paypal.
    rivardmichael
  • Is it time?

    No.
    james347
  • Hedaless turkeys

    ?Now we had this auction business. We like it, it brings unique inventory and buyers. Our goal is to get auctions stable.??John Donahoe.

    ?eBay outlined a new three-year strategy yesterday?

    Wot, another three-year plan; what happened to the last one? Did it not do enough damage?

    ?? believes PayPal could displace eBay's core marketplace unit as the company's biggest business in three to five years.?

    The way this turkey Donahoe is driving the eBay Marketplace into the ground, this statement is undoubtedly correct, except that PayPal will also pass into history once the banks, the ?professional? payments processors, finally get off their butts.

    ?The projections helped eBay's shares climb 8% yesterday.?

    I never realized that there could be so many sheep grazing on Wall Street.

    I recently read an article that mentioned the ?Dunning-Kruger effect?, which states that there is a cognitive bias in which unskilled people make poor decisions and reach erroneous conclusions, but their incompetence denies them the metacognitive ability to appreciate their mistakes. Or, as Charles Darwin put it, ?Ignorance more frequently begets confidence than does knowledge.?

    I now understand how a headless turkey like John Donahoe can continue to display such confidence in his own very obvious lack of ability: clearly, he lacks the metacognitive ability to comprehend his own folly.

    eBay/PayPal/Donahoe: Dead Men Walking.
    Philip Cohen
  • RE: Is it time for an eBay renaissance?

    I am primarily an ebay buyer with over 1000 positive feedbacks. I have had a largely good experience with ebay and find them normally the low cost provider of goods versus other retailers. I have had no problem selling items either. The complaints about holding funds is not justified (from a buyer prospective). I have run across several fraudulent sellers who used various tricks to jack up their feedback to make you think they were legit. If the consumer becomes afraid to spend their money on ebay, then the whole system falls apart. It has to be 100% about customer experience. Price, convenience and customer experience are what will make ebay a winner.
    M.M.Grimes
  • RE: Is it time for an eBay renaissance?

    Renaissance? Allowing sellers to list 50 items without upfront fees while other major sites have unlimited no-cost listings with stable final value fees? Charging final value fees on shipping to discourage sellers from international sales? Thinking that buyers are naive enough to believe that "free shipping" is free? Oh come on? This is a renaissance?

    eBay does have potential. It has a certain name value. But, I am so tired of the lame spin campaign. If they would just try to keep it simple and fair, maybe that would be a renaissance.
    lostlizardtc