Friday, April 18th, 2008
John Donahoe talks to eBay Ink
Two weeks ago, John and Pierre conducted a live webcast to the entire organization that emphasized a need for open communication and what can only be described as bold steps for the company (I’m working on getting video excerpts of the conversation to share with Ink subscribers soon).
Before they sat down together, I was able to get a few minutes with John on my own in which he shared a lot of the same themes that came up in his discussion with Pierre. I had hoped to share this with Ink readers sooner than now but with the quiet period in place heading into earnings, I was unable to do so.
Before we jump into the original conversation, however, I wanted to make sure I addressed a timely and critical discussion that has been given more fuel by a Financial Times story, that ran on the heels of the earnings news this week, that I felt needed clarification directly from John. So, the first question and answer below is from earlier today. The rest is the transcript of my conversation with him on March 21. I plan on sitting down with Skype president, Josh Silverman, in the coming weeks to get his take on the future. For now, here is my conversation with John.
April 16, 2008
Q. I read in the Financial Times that we may sell Skype. That if the synergies are strong, we’ll keep it in our portfolio. If not, we’ll reassess it. Is this true?
We have no plans to sell Skype… and why would we? As I said in the story, it’s a great business with a great purpose — enabling the world’s conversations. With a new president, our plan for Skype is to focus on providing the best possible user experience and continuing the incredible growth momentum we’ve enjoyed with Skype for the past four years.
To be clear, I’ve fully supported big investments in Skype, including removing the earn-out, and bringing over some top talent like Josh. I think this business has tremendous potential that we’ve only started to tap. Josh and I are both excited about the prospects … our job now is to make sure we continue to build on Skype’s successes and grow its passionate community of users.
March 21, 2008
Q. Thanks for taking the time today. I’m going to jump right in by addressing the marketplace. There’s been a lot of talk about how you look at the business. Some of our users have even claimed that you don’t like the marketplace. What do you say to that?
I love the marketplace. I love the purpose, mission and values that underlie eBay. It’s why I left a really good job to join this company. I have enjoyed getting to know our community, this business, and the employees over the last three years. And yes, I love the marketplace! Let me share a story with you: I spent New Year’s in Australia visiting an old friend of mine – a music lover – and I wanted to send him a thank you gift. I went and found the entire collection of KFOG – Live at the Archives on eBay. There’s no place else in the world where I could get a collection like that so easily – I got volume 4 - 14. I went back and forth with several sellers – building the collection. And then I found a seller who had a set but had already sold it. I asked him where I could get another one (for myself) so in the end I was able to send one to my friend and get one for myself. That kind of interaction never ceases to excite me. The seller has since emailed me and asked me if I had listened to song 4 on collection 6 … to me, that is eBay.
So, I love the marketplace and I love our purpose and mission. More than anything, I feel a huge sense of responsibility to maintain the vibrancy and the relevance of eBay in today’s ecommerce environment … and in tomorrow’s. And that to me is the biggest challenge.
Q. Speaking of challenges that you face; specifically as the new CEO on the block, Meg said in her internal memo to employees “It’s time for eBay, and this community, to have a new leadership team, a new perspective, and a new vision.” How does your vision differ from Meg’s?
The world is changing and it’s a different time from when eBay was born. There are different formats and platforms that sellers can sell on. There are different websites that buyers can buy on. I view my biggest priority and challenge is to ensure that we bring the very best of what eBay has represented over the years. This means giving buyers great value and selection and giving sellers a great opportunity to sell at unparalleled volumes and to bring eBay into today’s world and tomorrow’s. So that buyers say “eBay is the best place to find value and selection and I will continue to come back” and so that sellers are able to sell and make a living which in turn fuels eBay’s success.
Q. You continue to reference challenges and you’ve also been quoted as being aggressive when facing those challenges. In the January earnings call, for example, you said that “we’re going to get very aggressive about making eBay easier and safer to use”. Can you elaborate on how you actually see us being aggressive? Provide specific examples?
We have to confront some sacred cows. Our guiding principle is what is best for our marketplace? What is good for the buyer? At the end of the day we need buyers and what has distinguished eBay from the beginning is the extraordinary traffic. We’ve done a lot of research on buyers and we know what turns them off. Our best buyers are telling us that they’re having too many bad experiences and that is unacceptable.
Q. What kind of bad experiences?
A big issue is excessive shipping charges. A second is that the item is not as described. A third is item not received. A fourth example, which is particularly infuriating, is when a buyer receives retaliatory negative feedback. Our most active buyers have told us that this was among their primary reasons for buying less on eBay. But we’re doing our part to make it better. For example, we’re focusing on providing better customer support and protections for our buyers when they have a bad experience. Our number one goal is to ensure that our marketplace provides the best experience for buyers so that they come back.
Q. What about the seller experience?
On the sellers’ side we heard a lot of feedback, too. Sellers came to us and said a number of things, including that incentives aren’t aligned enough … that they were absorbing too much of the risk with insertion fees … that they wanted to list at higher volumes and create listings more easily. They also told us they wanted to get a gauge of where they stand in terms of performance.
The new pricing that we’re rolling out is directly in response to this feedback. The seller dashboard that we’re rolling out in May is in direct response to that. We’re making improvements to our tools for casual sellers. For example, we instituted a process that has cut down the listing time by a third. And for larger sellers, we’re doing a number of things that will make their experience on eBay much easier. We’re determined to be the healthiest and most vibrant marketplace today for both buyers and sellers.
Q. Taking a step back from the Marketplace – looking at eBay Inc., the big picture. We have a lot of irons in a lot of fires… what is it that keeps you up at night?
It’s having the courage to stay with what is right for our customers, even when there is controversy around it. I really care a lot about listening to the community. I care a lot about being customer focused. But I also recognize that there are 80 million different opinions out there and it’s tough not to be paralyzed by that many different beliefs on where we should go as a company.
I feel that our user experience didn’t keep pace for a number of years, partly because we were trying to please all of the people, all of the time … we became less decisive in making changes that we had to make. Now we need to have clarity and conviction to acknowledge what needs to be done – and then do it.
For example, we instituted detailed seller ratings last year, which caused a lot of controversy in the community. But we know they’re working – both buyers and sellers are telling us that. At the end of the day, we must have the courage to do what’s best for the marketplace.
That’s not to say we won’t make corrections where needed. For example, we announced changes to pricing across the board at the eCommerce Forum, but heard from some sellers that the structure didn’t suit certain categories very well. So, we went back and changed pricing for media, such as books, CDs and DVDs.
We are going to be much more balanced moving forward in terms of being responsive, yet sticking with our conviction.
Q. Any advice to the new guy?
Listen and have passion. Our goal is not to be a finely tuned, smooth, perfect machine. The minute our community stops talking is the minute I worry. Because their opinions, constructive criticism or praise, stem from passion. People are basically good – that is our belief. And we will not shut our ears to what people have to say – we will embrace it.
Tagged: ceo, ebay, eBay Ink, ebay interview, ecommerce, executive profile, interview, john+donahoe, Marketplace, online marketplace, paypal, q&a, skype
implogOn 04.19.2008 at 2:51 pm Said:
I’m not sure Mr. Donahue is on the same page as our dear Uncle Griff and the eBay bot that responds to buyer/seller complaints about retaliatory negative feedback.
Their responses to retaliatory neg complaints are copied below.
~~~~~~
From “Uncle” Griff & “Aunt” Flossies Vault, (www.unclegriff.com)
“Uncle” Griffs’ pearls
of wisdom:
“First, feedback was not intended to be a beauty contest. eBay provides the Feedback Forum as a completely open and fully disclosed site for users to leave comments regarding their experience with other users.
Many users ask, “I was the party in the right when I left this person a negative and this person then left me an undeserved negative response. You must prevent this!” (Uncle paraphrases. Usually the language is much more colorful.) We understand a user’s concern but, in the interest of fairness, we simply cannot “bar” a high bidder or seller from leaving a “retaliatory” negative comment in response to one left for them, whether or not it was deserved.
Consider this: What if the high bidder had left you a negative comment first? As high bidder, this person would have the right to do so. In a dispute between two people, fairness demands that both parties be given the opportunity to state their case. The jury (other eBay users) must judge for themselves who was the aggrieved party and who was the offender.
A majority of good comments will overshadow the few obvious response negative feedbacks. However, if good, honest users do not leave negative feedback out of fear of receiving a negative in return, then by their inaction, they are essentially letting the bad guys win.
Savvy eBay users understand that honest users will acquire a few “battle scars” when leaving an accurate and deserved feedback comment for a transaction gone bad.
Regards, Uncle Griff”
*****
Copied below is the eBay bot canned response to any buyer or seller writing Trust and Safety about retaliatory negative feedback. This response is current as of today.
~~~~~
Thank you for writing to eBay. Please allow me the opportunity to assist
you further with your concern in regard to the negative feedback left by
member “yyyyyyyyyyyyy”.
xxxxxxxxxx, I can certainly understand your concern regarding the feedback comment you have received. It is very regrettable when members leave unfair or inaccurate feedback rather than working with their transaction partner to resolve any issues.
I reviewed the feedback in question, however, the Feedback comment you reference cannot be removed because it doesn’t meet eBay’s requirements for Feedback removal. eBay doesn’t edit or remove any comments except for those outlined in the Feedback Abuse, Withdrawal and Removal Policy.
This is the case even if you believe those remarks to be inaccurate or harmful to your name, character, or reputation.
Violating other eBay policies is not, by itself, grounds for Feedback removal, except as specified in the feedback Abuse, Withdrawal and Removal Policy.
We provide our Feedback Forum and community discussion boards as places where members can feel free to express their opinions without fear of censorship. An important tradeoff of this freedom is members are held solely responsible for the comments they post.
To review eBay’s complete Feedback Abuse and Removal Policy, go to:
http://pages.ebay.ca/help/policies/feedback-abuse-withdrawal.html
I regret that we’re unable to meet your request for Feedback removal. Feedback is continually a topic of discussion at eBay and probably always will be. Receiving unfair or retaliatory feedback is the biggest concern when feedback is discussed and wanting to maintain a blemish-free feedback history is an understandable goal.
In fairness, we cannot prevent a member from leaving a retaliatory negative comment, whether or not it was deserved. Please remember that most members will look at a bidder’s or seller’s complete history when deciding if they want to conduct business with him or her. xxxxxxxx, a member who is conscientious, helpful and honest like you will always have many more positive comments that will overshadow a few obvious retaliation feedback comments.
Most eBay members understand that honest members will acquire a few “battle scars” in the fight to expose the less then honest members of the community.
Other members do refer to a member’s full feedback history when determining whether or not to enter into an eBay transaction with them.
I understand that this may not be the resolution you were hoping for, and can certainly empathize with your position. However I want to assure
you that I have done everything with respect to this case while following eBay’s guidelines. As an eBay user myself, I know that it can
be extremely frustrating when a transaction doesn’t go exactly as one hoped.
XXXXXXXXXXXXX, I appreciate your patience and understanding in this matter.
MsFish213On 04.19.2008 at 3:32 pm Said:
After all the posts, and all the questions that remain unanswered here, do you not see the writing on the wall yet? It doesn’t matter what sellers want or think. The plan was made and they are sticking to it. Its their playing field. The best you can hope for is that there will be some slight modification on some of the changes. But don’t bet the house on that. If you don’t want to play by their rules, you need to take your ball and go home. None of the changes made and none of the changes coming in the future, will be reversed. Period. End of story. As someone once said, either adapt or die here. It is really YOUR choice now. The rules have been laid out for you.
oakteakOn 04.19.2008 at 4:14 pm Said:
Re: Skype that they are not going to sell– this was on Google news today.
http://news.smh.com.au/ebay-weighs-selling-skype/20080419-277k.html
There are more spins going on than a whirling dervish does,– in all of the aspects of changes.
Formerly Known As MarikaBooksOn 04.19.2008 at 7:52 pm Said:
When JD says they listen to sellers he is talking about the upper tier PESAns. Nobody else counts including the cheerleaders now. They recently shafted one of their own Hall of Famers who is also a Voice of the Communtity when they dropped digital downloads. I would imagine they see that as friendly fire.
CrunchyPostingGoodnessOn 04.19.2008 at 10:02 pm Said:
@ Richard
I know there probably wasn’t the opportunity before this interview, but perhaps in the future when you have a scheduled interview with an eBay representative you can ask posters for a list of questions we would like to have asked?
As regular users of eBay, I’m sure we have some important ones which pertain to our every day experiences with eBay. For instance, several posters asked the question of why PayPal is only making all buyers addresses confirmed for Power Sellers, instead of for all sellers, to Sarah Livnat Manager of Seller Protections at PayPal in the AU PayPal thread, but received no answer.
I think this is a very important question, which needs to be addressed, as if affects the majority of sellers on eBay.
Priceless_SteinwayOn 04.19.2008 at 10:26 pm Said:
Quote: “A fourth example [of bad buyer experience], which is particularly infuriating, is when a buyer receives retaliatory negative feedback.”
True enough the system was broken. However denying sellers the ability to leave negative feedback creates an environment ripe for extortion. It would make more sense to tie the ability to leave negatives to the results of the ebay/Paypal dispute resolution process. A loser in a dispute should NOT be able to neg the winner.
The result of the policy change is that many sellers simply may quit leaving feedback altogether.
BrendaOn 04.20.2008 at 8:10 am Said:
An interview with you done in March is not the same as direct contact with the posters here.
Mr. Lieberman at least was here posting directly to other posters.
I know if nothing more effective towards building morale and loyalty than a willingness to roll up your sleeves and go into the trenches with the troops.
Sellers at any level of volume have shown an entrepreneurial spirit and are less apt to buy into corporate talk as opposed to an employee. It’s a matter of mind set. Self directed vs. directed.
Again, instead of removing aspects of feedback, why weren’t the language and etiquette parameters examined first? Does Ebay think that the shifts won’t be noticed. Isn’t the type of change similar to when a food company reduces the standard portioning by a tiny increment as opposed to a price increase? And when the portion has been accepted the price increase will follow.
The sellers of Ebay may not be in the Fortune 500, but are funtioning at CEO level non the less, regardless of volume. They have earned the show of respect that has been lacking.
geoffOn 04.20.2008 at 5:04 pm Said:
Interesting article but so far from the truth that you wonder what kind of world they live in and if they ever listen to anything past the analysts views on their stock price.
A portent for the future for all EBayrs is happening here in Australia where EBay is trying to mandate the use of Paypal for ALL transactions. No cash, cheques, bank deposits, separate CC transactions if you happen to have a merchant a/c….ALL transactions except for COD will be forced through Paypal. This is for ’safety’ reasons!! I would estimate that 50% of my transctions are settled through direct deposit to my bank account and I believe this is true for most Australian EBayers. Money transactions don’t get any safer than through the banks and EBay is trying to conduct what we consider 3rd line forcing…and it’s illegal here. You guys in the US should wise up to this now…we are only a tadpole in the EBay pool and thus a good place for ‘experimentation’. Your turn next prehaps?? beware!!
LurchOn 04.20.2008 at 11:26 pm Said:
Crunchy - Richard is not acting as an ombudsman, so not sure that will happen. Good idea, though!
AnnOn 04.21.2008 at 10:20 am Said:
@Richard
I think Crunchy has the right idea. Ask US what we want to ask Mr. Donahoe. Then let’s get some real answers, not canned PR.
Also, I’d like to see those numbers you refer to run again, with those that have sucessfully bought and/or sold at least 10 items. I assure you the results would be much different. The skewed way it is now shows all “throw-away” ids, people who bought something once years ago and never came back, etc. If you change the criteria to 10 items, you’d get a much better and more accurate sampling of where your true demographics for your real users, both buyers and/or sellers lie.
MistyOn 04.21.2008 at 11:58 am Said:
Quote “Regarding sellers and buyers as eBay customers, I saw a chart recently that broke down users who had successfully bought or sold at least 1 item.
US users - sold only - 2%
US users - bought only - 78%
US users - bought and sold - 20%
The global figures weren’t that much different and the grand totals showed that something like 74% of all eBay users had only bought on the site.”
Richard how many of these buyers are actually sellers with a separate buying account? I don’t feel these figures are truly accurate considering eBay does not verify it’s buyers.
RichardCOn 04.21.2008 at 12:24 pm Said:
Richard, You mention in-person opportunities for eBayers other than “Voices”. eBay live has an admission fee, and the eCommerce forum is by invitation only. As far as eBay employees at the booths for eBay live- it is more like the Stepford wives than anything else.
Just want to set the record straight
CrunchyPostingGoodnessOn 04.21.2008 at 12:40 pm Said:
@ Richard
“I believe there are a number of in-person opportunities for buyers and sellers to provide feedback such as eBay Live! and the eCommerce Forum.”
Users should not have to pay additional money for the privilege of speaking with an eBay representative regarding policy changes. I’m able to email Amazon with the changes I would like to see, and it takes very little time to get a non-canned response from a representative that they will look into it, and within a few months I have seen the changes I requested in effect.
“There are Seller Dev programs that engage sellers directly about best practices and feedback.”
When eBay said that they were going to provide sellers with one-on-one guidance over the phone on how to improve their selling experience and grow their business, they were shot down by the representative saying, “I’m not here to discuss policy changes - I’m here to discuss growing your business”. How can a representative help a seller grow their business without discussing the impact the recent changes are having on the growth of the seller’s business?
“I think it’s agreed that we can’t get input from each of the 80 million+ users (that John references in his conversation with me) but we can certainly get representative samples.”
A representative sample must be researched and validated before counting the results. For instance, if eBay polled buyers and asked if they ever received an undeserved negative, eBay should research a sampling of those who said “yes” and those who said “no” and investigate if those allegations are true. If eBay sees that some buyers said “yes”, but after research discovered the buyer actually received the neg for a good reason (coercing seller to mark custom’s form as gift, non- paying bidder, etc.) then eBay would need to either research all of the rest or throw out the poll as invalid. Of course, that is only if eBay wanted to make sure that the data they were basing devastating decisions for sellers on were accurate or not.
@ Implog
“This is the case even if you believe those remarks to be inaccurate or harmful to your name, character, or reputation.” & “In fairness, we cannot prevent a member from leaving a retaliatory negative comment, whether or not it was deserved.”
Funny isn’t it how eBay believes that sellers should be okay with receiving retaliatory negs, but it doesn’t expect the same of buyers….
@ Lurch
“Crunchy - Richard is not acting as an ombudsman, so not sure that will happen. Good idea, though!”
From the original announcement eBay first made regarding the creation of the eBay ink blog, it was my understanding that Richard was meant to serve as an independent third party, who would look at the reality of what eBay is based on information and issue brought up in this blog. He has already attempted to do so with regards to a few issues, so I’m hoping that he will continue to do so, perhaps more aggressively.
DagnyOn 04.21.2008 at 1:12 pm Said:
@Richard
I’m curious about those statistics. Are they calculated on the number of members or member ID’s. I have three ID’s, but I am only one user. I have sold on two of the ID’s and not the other.
Many members have multiple ID’s for selling, buying and posting.
If they are basing those numbers on user ID’s, then those statistics are inaccurate.
So is it users or user ID’s?
GriffOn 04.21.2008 at 2:03 pm Said:
Richard has been politely pestering me to contribute to this forum for a while now (Hi Richard!) and I have been extremely busy with other projects here at eBay. However, this seems like a pretty good time to chime in with some clarifications and some thoughts.
implog:
The piece you referred to above was written by me and posted in August of 1999, back when the current feedback system as it is, worked. The current system does not work today.
Priceless_Steinway:
“…It would make more sense to tie the ability to leave negatives to the results of the ebay/PayPal dispute resolution process. A loser in a dispute should NOT be able to neg the winner….”
As we have announced (and as we have repeated since the announcement), if a non-paying buyer in a UPI dispute does not respond do the dispute (and by “respond” we mean a substantive, verifiable response), that buyer will be blocked from leaving a negative. If the buyer has already left a negative, it will be removed. If a buyer is suspended from eBay (for whatever reason but for the sake of this discussion, for attempting to use feedback to extort a seller), all of the feedback left by that buyer will be removed from the site.
There is a fear among some sellers – expressed here for example - that once the feedback changes are in place next month, vast legions of “bad buyers,” who have been waiting patiently in the wings, will suddenly descend on the marketplace, leaving hasty and undeserved negatives willy nilly.
That is not going to happen. Here’s why. There are tens of thousands (or more) sellers on eBay right now who have been employing feedback as though the changes have been in effect for years. They always leave positive feedback immediately upon receipt of payment which effectively “blocks” them from leaving a negative for a buyer. These sellers tend to have fewer disputes and higher rates of positive feedback and DSRs compared to those sellers who either subtly or overtly hang the sword of negative feedback retaliation over their customers.
Although I expected that there would be many sellers who would view this absolutely crucial change as threat to their own reputations and businesses (it is human nature to fear change), I was surprised by the reasons and logic many have attributed to us for making the changes, many of which posit a theory that somehow, commerce is a sort of combat, the buyers VS the sellers or the sellers VS eBay. Put aside for a moment what you might have heard outside of eBay or from others or what you might believe regarding the reason for the changes and consider this:
We manage a marketplace, eBay. We, like you, want to, indeed are required to be as successful as possible. Your success (sellers) is absolutely crucial to the success of the marketplace. As stewards of this marketplace, our job is to help you build your success by providing – among many things but most importantly, as many eager, good buyers as we possible. If our own incontrovertible data shows us that good, paying buyers have been turning away from your marketplace and if the primary reasons given by those good paying buyers (those who have stopped shopping on eBay) is they left because they received a negative feedback for leaving one for a seller, then it is our job, our ethical duty to you and to the success of this marketplace to do what only we, as stewards, can do:
Change the system.
If anyone has any questions, or wants any advice, tips, suggestions, etc on how to adapt, survive and thrive during this admittedly tumultuous year of change, feel free to email me directly and I will offer whatever assistance I can. I answer my own email, day and night, 24/7 (don’t let anyone think for even one moment that eBay isn’t my entire life…)
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