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13 commentsThursday, July 17, 2008

Second Quarter Results Sink eBay's Stock

"Meh" numbers don't measure up

eBay's second-quarter earning report was respectable, all in all, with increases occurring in most measurable categories.  Many of those increases didn't meet investors' expectations, though, and the company seems to have adopted a cautious outlook for the future.

The end (or at least current) result: eBay's stock is down 15.70 percent so far today, even as the rest of the market has more or less remained steady.  Also, "Re: EBAY IS A JOKE" stands as the top discussion title on Google Finance.  This isn't the sort of thing that can make John Donahoe, the company's new-ish CEO, comfortable.

eBay Stock
 eBay's Stock Slides

Let's get to the report's numbers, then.  Pia Sarkar writes, "Gross merchandise volume - the total value of all goods sold on eBay - totaled $15.68 billion, an increase of 8% over the same period last year but a drop from the 12% year-over-year growth seen in the first quarter. . . .  Although eBay's listings swelled by 19% from a year ago, the number of active users increased by only 1%."

That second trend, at least, would appear to speak to eBay's new habit of embracing big, powerful sellers instead of its traditional fan base.  We're sure some of those former fans are having a good laugh right now.

On the other hand, Donahoe was able to state, "We have made bold moves across the eBay marketplace to accelerate long-term growth.  We remain confident in our strategies to improve the customer experience as we manage in an uncertain economic climate."

News Tags: Financial, eBay
About the author:
Doug is a staff writer for WebProNews. Visit WebProNews for the latest eBusiness news.

EBay

Listings went up 19% because they are giving Buy.com and others FREE listings. The listing numbers are meaningless now. The sell through rate is less than 40%, which is horrible. Smart investors sold this stock the day Donahoe took over the reins. He's already micromanaged eBay to death. New policies every week and trying to force Paypal on everyone has killed any interest in eBay.

I only buy and sell on Amazon now because they are a credible and safe website. And there's no requirement  to use an unsafe payment method such as Paypal. All Amazon payments are made with a credit card, unlike Paypal, who encourages buyers to pay with their bank or Paypal balance. How is that a "safe" way to pay?

eBay is Getting What They Deserve!!

eBay is getting exactly what they deserve and exactly what ex-eBay sellers and buyers have long expected since Donahoe took over and he and his people (like Lorrie Norrington) have made their "improvements".  As already stated, their listings are up ONLY because of their courting of big businesses such as Buy.com. What good is a listing though if it is cheap junk that no one wants to buy?? eBay will soon realize (though it is doubtful they will ever admit it) what a mess they have made of an otherwise established, solid, profitable business. Stockholders would be wise to dump this stock before it goes down even further which is all but guaranteed.

Donahoe, Norrington & Burke: PLEASE LISTEN! Ruining the feedback system for sellers was STUPID. Counting neutral feedbacks as negatives was STUPID (gee, what does the word neutral mean?). Raising fees was STUPID, especially considering that sellers are no longer getting the service (i.e. their goods bringing top dollar) that they were before the new "improvements".  We can't wait until the board dumps you three like the stockholders are dumping your stock!!

Don Barris

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