Is eBay on the Mend?
Posted by: Rob Hof on April 18, 2007
To answer that question: Partly. Clearly, investors liked the fact that the quarter’s growth overall looked pretty good, with profits up 52%, and especially that eBay upped 2007 estimates by $150 million in sales and 3 cents a share in profit. But growth in eBay’s core marketplace in the U.S. and Germany remains really slow—10% in the U.S. after taking out foreign-exchange benefits.
CFO Bob Swan told me that the slow growth was the result of cleaning up eBay Stores of me-too merchandise, as well as efforts to weed out fraudulent sellers. But CEO Meg Whitman said during the conference call that the benefits of those efforts “won’t happen overnight.” The company’s big effort this year will be making the buyer experience better. That will be crucial as rivals like Amazon.com keep upping the ante.
Oh, and almost forgot: eBay’s still on the acquisition trail. It just bought StumbleUpon, TechCrunch’s Mike Arrington reports. It’s a social bookmarking service that lets you rate sites and then “stumble upon” sites that match your interests. Pete Cashmore at Mashable provides eight reasons why, though even he’s not convinced by his reasons. Without knowing eBay’s thinking, it does seem apparent that anything that helps eBay buyers find stuff they’re looking for, instead of trolling through endless listings, has to help the company. (Update: Scot Wingo of ChannelAdvisor agrees.) Plus, eBay has so many different kinds of sites now, from Shopping.com to the international classified sites under the Kijiji umbrella, that maybe this technology can help users pluck what they want from among all those brands. (Update 2: Mike says a similar new toolbar feature from Google rains on eBay’s parade—not that anybody was parading except maybe the StumbleUpon guys, but the timing sure doesn’t seem accidental.)