Second Quarter Results Sink eBay's Stock

By Doug Caverly - Thu, 07/17/2008 - 11:23

"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'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.

13 Comments

By Sean (WPN reader) - Fri, 08/22/2008 - 15:50

I'm so sick of this!

I wish I had as happy a story as some of the folks here. I just got suspended today because of a few neutrals last month that were counted as NEGATIVES... and the cruel irony is that they retroactively were changed after I was suspended, as that is no longer the policy, so now my feedback looks great! I sell records and make (made) a decent living... I am at a loss as to where to go next. I used to love my job... the last few months have been stressful and in the end, I lost it all. If I had Donahoe in my hands I would feed him his own kneecaps. I suppose it could be worse... it's a shame he can't be in my shoes, 'cause even though he will never work at this level again, he won't be hurting for money like myself. Death's too good for him.

By Guest (WPN reader) - Sun, 08/24/2008 - 18:53

Feedback

Go to onlineauction.com quick! Give it a shot, $8.00 a month and the rules and fees don't change every week!

By Another ebay Power seller (WPN reader) - Thu, 08/21/2008 - 05:24

End of Ebay

I am more qualified than any ebay executives to make decision for ebay's future. I sold more than $700,000 of merchandise on ebay in the first six months of 2008 without having to accept Paypal or credit card. The average price of my items is $5,000. Now, if I am forced to accept credit card or Paypal, my listings will only attract careless buyers. I mean those buyers who get a kick out of buying a big-ticket item and return it with the help of paypal and credit card charge back.
Even worse! How dare ebay force me to prohibit my existing clients from paying me the way they see fit! Bye! Bye! eBay, I am done with You Morons who think they can save ebay by acting like Aldolf Hitler!

By Cloud Nine Sewing (WPN reader) - Wed, 08/20/2008 - 09:22

EBAY IS FINALLY RUINED - 20 AUG 2008 - POWERSELLER POINT OF VIEW

I read today that eBay is now going to phase out AUCTIONS and move to fixed price format.

Wait, did I read that correctly in the New York Times? YES, I did! eBay no longer wants auctions!

"Acknowledging that most online shoppers cannot be bothered with auctions, eBay plans Wednesday to announce changes to its fee structure that emphasize fixed prices over bidding."

Now that Mr. Donahoe has effectively ousted the PowerSellers who have been at eBay for many years (we were with eBay for eight years ourselves) by making negative changes to the way that feedback is tallied (which then penalizes PowerSellers by removing PowerSeller status - an incentive to sell) now Mr. Donahoe is pounding the final nail in the coffin: Encouraging sellers to no longer have auctions - the reason eBay exists at all - but simply sell.

Let me say something here, Mr. Donahoe: The reason people come to eBay is for what I call the "Las Vegas mentality" or the chance to win something at auction for far less than retail. It is that mentality that keeps people coming back and prevents eBay from becoming stale - and now you are removing that incentive also?

***If eBay stockholders are paying attention*** they should surely know that Mr. Donahoe is ruining eBay, first by alienating the engine of eBay - the sellers and PowerSellers at eBay - and now by attacking the very essence of eBay which is AUCTIONS and the excitement that goes along with auctions.

NO MORE AUCTIONS? NO MORE EBAY! EBAY = AUCTIONS.

And, lastly, the tidbit about how sellers can no longer accept money orders or cash for items? Well, we (a FORMER PowerSeller that lost PowerSeller status because of Mr. Donahoe's new "DSR" ratings system that stripped us of our PowerSeller status - even though we have over 2000 positive feedbacks and have funneled over $400,000 worth of sales through Paypal) will no longer sell big ticket items on eBay?

Why? Because we, the PowerSeller, were willing to sell big ticket items as long as they were paid for by cash or money order. However, we are not going to risk our monies by possible chargebacks from fraudulent people who might "buy" an item and then create a chargeback through Paypal that leaves us with nothing because the customer has the item and their credit card company gave them back their money - so Paypal took their money back - and we have nothing.

Think Paypal is risk free, Mr. Donahoe? Well, get ready for epic battles over future chargebacks and untangling those messes.

Besides which, listen to the doors slamming shut as the rest of your sellers leave the building because there are a LOT of sellers that do not accept Paypal because they cannot for various reasons, or will not, for the same reasons that we listed. (I also think that a lawsuit will soon attack your idea of only accepting a payment method that makes more money for you - while leaving the seller at risk.)

Yes, eBay was once a golden era and now it is gone, thanks to the foolhardy choice which made a man by the name of Mr. Donahoe in charge. We ourselves are now in the process of creating an auction format for sewing and hobby-related items so that people can still "bid" on items because we are niche hobby market that requires such a venue.

The truth is that if people want to buy things at "fixed prices" then they can shop at online stores, especially at Amazon. No need to even go to eBay if there is no chance of "winning" an item at all.

MR. DONAHOE, YOU HAVE REMOVED AND RUINED THE VERY ESSENCE OF EBAY - IT IS ALL DOWNHILL FROM HERE - AND WE FORMER SELLERS *PRAY* THAT GOOGLE COMES OUT WITH AN AUCTION SERVICE BECAUSE THE AUCTION MODEL *DOES* WORK WHEN THE INCENTIVE IS LIVE AND WELL.

By Brad (WPN reader) - Sat, 07/26/2008 - 04:27

Donahoe is a moron!

"strategies to improve the customer experience" How is this improving the customer experience? SELLERS are eBay's only customers! Sellers buy listing space and pay fees. Buyers are customers of the sellers. Ebay is just a venue!

By Thejumpsuitman (WPN reader) - Mon, 08/11/2008 - 10:56

Ebay has bitten the hand that feeds them

Brad was exactly right... SELLERS, NOT BUYERS are ebay's customers. The buyers are OUR customers. In addition to raising fees, cutting service and removing seller safeguards, ebay has begun manipulating their search engine with their "BEST MATCH" sorting system, directing buyers toward sellers who "fall in line". This actually hurts buyers because they may never actually see the best items! Now, ebay customers who pay the exact same fee per item listed no longer receive the same value of service. One seller's item will never reach the viewable level on a search because he has not figured out the system or has possibly received an undeserved negative feedback. Shame on the decision makers at ebay!

I believe I will take the advice of many other posters and look into developing my own site. My sales are down from $15K/mo. to about 6K since the changes. The selling success rate is also down from about 67% to 50%. And fees have increased. This all spells personal financial trouble for me, personally. All this after I decided to go full time with ebay in January... THANKS A LOT, EBAY!!!!

By Guest (WPN reader) - Wed, 07/23/2008 - 20:55

Actually, I want to thank

Actually, I want to thank eBay. I have been a powerseller with eBay for just under three years now. I was generally happy, but getting a bit tired of their disjointed customer support. One department will recommend you to another department without ever really knowing what the other departments can do, will do, or are unable to do. For example (I just love this), here is a direct quote from an eBay live chat representative about their Trust and Safety department just after recommending they transfer me to the Trust and Safety department for help: "To tell you honestly, we don't have any knowledge how they resolve issues like this. It is possible they will review and advise you about the matter".

When all the changes were announced earlier this year (fee increases, feedback, fund holding period, etc.) I submitted at least 5 different comments/suggestions to eBay regarding their new policy. Never heard a word. So hired a firm to develop us an ecommerce web site. Our site is almost doing as much business as we had on eBay in just over three months. Have now cut back our listing on eBay by 75%. Only keeping enough to promote/advertise our site. Plan on continuing with eBay at this reduced level indefinitely; great place to promote our site, lousy place to do business.

Thank you eBay for not listening to your customers. I knew I needed to build my own site, but was just too complacent. You pushed me into an entirely new channel that is working out great. I cannot thank you enough.

PS. I also sold all of my eBay stock about two months ago. If you own eBay stock, read the blogs - you may want to consider doing the same before the bottom falls out.

By parsonJ (WPN reader) - Tue, 07/22/2008 - 11:39

Another powerseller DONE with ebay!

I'm yet, another ebayer, who ebay has been driven out of business with ebay's new policies. Thanks to ebay, I have started my own site and can look back at my 9 yrs. on ebay as a learning experience. My time on the site in 2008, since the implementation of ebay's new policies, has been nothing but a nightmare... Deceit from ebay to the media, the stockholders and to it's own users abound. "Games" with feedback, listing numbers, stocks, counterfeit items, fees, forced paypal, etc. are activities that ebay plays and are NOT anything I want my reputation or business associated with. Stockholders NEED to take a long hard look at these "Games" and decide if ebay's worth the "gamble". Considering that ebay has ONLY replaced probably hundereds of thousands of ebayers around the world with ONE entity, buy (.com), I'd say ebay is a horrible investment. Buy.com's 500,000 free (or nearly free) listings, with a sell thru rate of approx. 2%, doesn't come close to filling the financial gap that ebay has created. Keep in mind that those ebayers who have been pushed out of ebay will NOT be returning. We have been damaged by ebay's activities and our faith & trust in ebay has been destroyed, as well. Donahoe & the rest of the current management needs to go and take their 2008 policy changes with them! Stockholders, we have been trying to warn you for months! Just take time to read ebay's own discussion boards to get the facts. Seller Central, Feedback, Paypal are great places to start. Make sure to view the last pages of Seller Central to read about the Worldwide Ongoing Global Ebay Boycott, too. Here are just a few of the countries whio have members who have joined the Global Ebay Boycott. Check out their ebay discussions to learn more. Germany, France, U.K., Singapore, Italy, Spain, Australia, Canada, Belgium, U.S.A.

By Baconsdozen (WPN reader) - Mon, 07/21/2008 - 06:14

Treat customers bad and they go bye bye

Ebay is getting what it deserves.Its treated its small customers and mom amd pop stores with contempt and some have now found new venues that treat them better.I like many others have used my own web site more and ebay less.They deserve all their bad press,what happened to the word 'Sorry'?.

By Guest (WPN reader) - Sun, 07/20/2008 - 15:20

Ebay versus ola.com

I was an ebay platinum seller and decided to give them the finger after I got sick and tired of all their crap. Money isn't as important as peace of mind sometimes. But I moved over to ola.com and became a founding memeber because I believe in the philosophy and effort they are doing which granted, has a long way to go before there is enough traffic to really make us money-successful as sellers there but at least their philosophy and system are designed to give us sellers a decent shake.

By Guest (WPN reader) - Thu, 07/17/2008 - 21:46

I AM Laughing my Arse off!

Ah, sweet victory!

It's no coincidence that this should be happening to ebay since their appalling changes. I am a platinum seller on eBay, doing 45k a month. Since the changes we have scaled back and are just using it to move our inventory as we open up our new site. Now we are only doing 20k, of our own doing though, as we are only putting in half the energy into it. We just don't care about it as much. I am not even as committed to making customers as happy as I was before the changes. We were at a 100% and we did everything to keep it that way. Now it's no use, our 100% has dropped to 99.5% because of neutrals from almost a year ago. Yes they are changing it, but it's too late. Some of us are never coming back.

It's a shame, we were on track to doubling our sales to 100K. I actually enjoyed ebay, it afforded me a great living. But we are never going back, EVER. Our website is coming along quite nice. The only regret we have is that we put all our eggs in ebays basket. Never again, it's their loss. We will be just fine.

By Don Barris (WPN reader) - Thu, 07/17/2008 - 14:11

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

By Ruth (WPN reader) - Thu, 07/17/2008 - 12:56

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?