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.)

Reader Comments

Randy Smythe

April 20, 2007 2:54 PM

Hey Rob,

The media category is apparently the scapegoat for all that is wrong with eBay’s US and German sites which is curious since the UK is a vibrant and growing marketplace (eBay’s shining star) and Media is doing very well over there.

So what is eBay's plan now? They raised fees to force Media Sellers off the platform last year. Some went out of business some left the platform completely (Caiman) but apparently not enough to solve eBay.com and Germany's problems LOL. (I never knew Media was a problem in Germany)

If Media was the target of last years fee increase why did eBay raise fees on every other category as well? (Oh, I forget there is a level playing field).

EBay management can’t figure out what to do with Media. In 2004 they wanted to close Half.com – that didn’t work – That move just created more problems on eBay.com. In 2006 they tried to kill Media off with fee increases – that didn’t work – What’s next?

Media is not the problem with eBay.com and Germany! The media category is broken and eBay management is responsible for it. My guess, instead of another across the board fee increase they will just stop selling media on eBay.com and tell them to sell on Half.com – That approach doesn’t make since to me but what do I know. Heck, maybe GlacierBayDVD was responsible for all of the problems. Grow some “Stones,” eBay, and address the problem, there are solutions out there.

Shashank Garg

April 24, 2007 8:51 AM

Hi Rob,

Here we can see true colour of dot-com economy where eBay, a high flier of the Web era, is now struggling to maintain supremacy in the market. No doubt barrier is low, supply chain has become very short i.e. companies become more venerable against hackers but interesting to see how PayPal, Skype and now StumbleUpon can help eBay to revive a sinking ship.

vcaobest

May 7, 2009 11:58 PM

They raised fees to force Media Sellers off the platform last year,http://www.vcao.net that maybe this technology can help users pluck what they want from among all those brands.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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