Posted by: Rob Hof on December 17, 2007
The New York Times has discovered that buyers and sellers aren’t all happy with eBay. Forgive me, but I think I’ve heard this before.
I don’t mean to belittle the many commenters on his post calling for Amazon to buy eBay, a suggestion seconded by Henry Blodget. (Which seems extremely unlikely for all kinds of reasons: eBay’s too expensive, Amazon CEO Jeff Bezos can think of many better ways to spend $45 billion-plus, eBay’s challenges are not something Amazon can solve anytime soon, eBay isn’t doing so badly that it needs to sell, etc., etc.)
Buyers and sellers clearly have valid concerns eBay and its payment unit PayPal. By its very nature, eBay’s marketplace model, in which is acts only as a venue for merchants, limits how well the company can control the buying experience. And sellers will never be completely happy in a marketplace where the buyers literally have a voice through feedback ratings. They’re also finding new places to sell, such as on Amazon and their own Web sites. So it’s quite possible that eBay’s challenges are greater than ever.
Still, after covering eBay for the better part of a decade, I came to view these periodic outpourings of anger from members with a skeptical eye. This just seems to be a perennial hobby of a lot of eBayers, who then come back to keep buying and selling on eBay. One of the first things I learned was that the best way to get burned on a story was to read the very public complaints of eBay members and assume eBay is about to tank. Time after time, I watched other publications predict eBay’s imminent fall based on these complaints, only to see eBay keep plugging along. Even today, eBay, for all its core growth challenges and seemingly wrong-headed acquisitions such as Skype, is growing revenues at 30% last quarter—with a similar jump in operating profits negated only by a huge goodwill impairment charge related to the Skype deal.
So while the complainers may turn out to be right one of these years, don’t be surprised if eBay somehow manages to survive for some time to come.