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
Renee'On 04.22.2008 at 5:44 am Said:
@Richard regarding you response: @ Mechelle — “why was it necessary to hold off on presenting this until after the quarterly reports? I don’t see anything that would affect the reports in this “interview”.”
I agree that the interview itself could have been posted at anytime before earnings… my reason for holding until after earnings was because I allow comments on all posts to this blog. I was worried that questions would be asked that I - or someone else here at the company - would be compelled to answer that would violate our recognized quiet period going into earnings.
Do you have any comprehension why there is a “quiet period”? It is so some fool doesn’t make a ooops comment and kill the quarterly earnings by getting in the newspaper. Your response to Michelle explains very clearly that you are nothing more than a company “yes” man. Don’t bother to reply, we won’t believe anything you say any more than the other company “yes” men.
@ all of Donahues comments. It is well known you can catch more flys with honey, but not when you make is so sickenly sweet that you give all the flys diabetes.
@ Griff
I use to hang on your every word, feeling you were the best expert out there. That is until you became corporate eBay. I am curious how much eBay stock you own and if you have sold any of it off.
As TheBrewersNews pointed out the audacious shipping charged for your “Bible” in the PowerSeller store. You have no right even representing us sellers at this point. You are just one other “Yes” man in a long line of them.
I am also curious, will you be updating your Bible with a section on how to not get skrewed by eBay’s new policies?
And no one here has even mentioned the blatant hints (statements) about more fee changes coming and how we won’t even recognize eBay by this time next year statements that have been made.
By the way, just in case you are interested, I have 100% positive feedback, high DSR ratings, and have tutored people on selling on eBay as well as being a trading assistant.
Since the great “best match” search implementation, I have not been able to sell a thing because I can not be found. I will no longer sell for others nor will I tutor new sellers in something I do not believe in.
I have sailed down the river never to return.
Have a good day and I hope eBay gets what they deserve, the nick name of “made in china” because that is all that will be left.
Oh and if anyone really thinks Richards blog is unbiased, read the disclaimer when you go to submit your comment.
“Notes: Please note that eBay may, in our sole discretion, reject comments for
any reason we deem appropriate. Links of value to readers are welcome, but
please use them sparingly - wield spam and you’re banished forever.
This is a moderated site and comments will appear if and when they are
approved. We will review the queue several times daily, so please don’t
resubmit if your comment doesn’t appear immediately.”
eeBartOn 04.22.2008 at 6:08 am Said:
Using Richard’s own statistics, there are at least 1.6 MILLION sellers on eBay. What eBay seems to have lost track of is that without sellers, THERE IS NO MARKET ! Of course you need buyers as well, but the product comes FIRST. Prospective buyers don’t enter a store that has nothing in the window. The seller has all of the burden (locate product, figure out how to price & market it, packing & shipping, etc.). All the buyer has to do is bid & pay… just a few mouse-clicks. It is eBay’s misguided focus on the buyer that has created all of this furor.
CrunchyPostingGoodnessOn 04.22.2008 at 8:49 am Said:
@ Richard,
The following quote by Misty is very relevant to the numbers you listed regarding seller only, buyer only, or bought and sold: “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.”
My business partner and I have three ids with eBay. Our business selling id (which we do not buy on at all), my buying id, and my partner’s buying id. We keep these separate ids for buying only for two specific reasons. First, it is to protect our selling id from receiving feedback which doesn’t pertain specifically to our abilities as a seller. Second, to keep the business records clean for accounting purpose by not intermingling personal items with business. Third, to keep our own personal privacy as to what we choose to buy, if anything, on eBay.
If eBay is believing that these three ids represent three different individuals, then it is obvious that there figures are inflated and inaccurate for the evaluation purpose they are using them for. Actually, our three ids are very conservative. A lot of sellers have separate ids for each category they sell in, so one seller could have numerous selling and buying ids. This is what I mean by eBay needing to research the validity of the numbers they are using before blindly trusting in them to make decisions.
@ TheBrewsNews
I just wanted to say, “Hi!” I have read your threads on eBay’s Seller Central forum board in the past and I think they have always been well written, well thought out, and very relevant. I am very happy to see that you are posting on this blog too.
eBay and Richard need to hear from numerous “voice of reason” sellers like yourself, and the many other sellers that have posted here too.
CrunchyPostingGoodnessOn 04.22.2008 at 9:03 am Said:
@ Griff (and Richard, in case Griff doesn’t come back to respond.)
“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.”
Seems to me that that users experienced, what eBay incorrectly coins as “retaliatory”, back then too. The difference is that eBay’s (your) response back then is exactly what eBay is telling seller’s right now. They (you) realize that seller’s will receive unfair and unwarranted neg feedback, but they just need to deal with it. So, if your response to either party is exactly the same as in the past, then I say that the feedback system remains “not working” in spite, and even more so because, of the changes eBay has made recently in feedback.
“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.”
The problem is that eBay representatives do not “verify” anything to see if it is true or not. Does the eBay representative actually contact both parties to find out the truth when a negative feedback is disputed? Does an eBay representative ask the seller to submit proof (postage receipt, private emails, etc) that the negative feedback is unwarranted? If not, then a buyer can still make harmful and unjust claims in their feedback without any concern of accountability. This is not the type of buyers that eBay should be trying to retain. It is precisely this catering to this type of buyer which has caused my business to sell elsewhere.
“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.”
These bad buyers already exist and already do substantial damage to sellers on eBay. All these changes are doing is rolling out a welcome mat for even more. There are entire websites which spell out step-by-step instructions how to scam as seller on eBay by exploiting the loopholes within eBay’s policies and procedures. This recent change is only providing scamming buyers with an easier tool to do so.
When eBay first announced the changes, some sellers started receiving threats of negative feedback if they didn’t do what a buyer unrealistically wanted, because these buyers thought that the feedback changes were already in effect. I suppose the sellers where just imagining these emailed threats? I suppose they imagined the bright, red, unwarranted negs which appeared on their feedback records shortly after?
It isn’t that these changes will create more bad buyers, as they already exist. In fact, Ebay recognizes this by expanding the capacity of the blocked bidder list for sellers. The problem is that eBay already has a reputation as a scammer’s paradise, and now it will simply attract these scammers more, by providing them with these tools to scam easier.
“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.”
On the forums I have read countless sellers who had started leaving feedback first, since the changes where announced, only to receive more unjustified negs from buyers, without communication. I have also read from sellers who started out selling leaving feedback first, only to switch to leaving it last, when buyers started leaving neg feedback without even bothering to contact them. Forgive me if I care to believe actual experiences provided by these sellers, rather than eBay’s numbers, which have already proven to be unsubstantiated and unreliable.
“Your success (sellers) is absolutely crucial to the success of the marketplace.”
Wrong. Ebay’s success lies in collecting fees and money from pay-per-click advertising on their website. In order to do this, eBay requires people to bid on items, but that doesn’t mean the person has to actually pay - just bid. eBay still collects its fees when a buyer performs a credit card charge back, without returning the item. eBay still collects its fees whether or not a seller receives an unjust neg. As a result, eBay attracts more traffic to its site, in the form of scamming buyers, which help to inflate the attractiveness of using pay-per-clicks ads on eBay. This traffic helps eBay charge more for such advertising space, and hence more income for eBay.
The successfulness of the sellers has little to do with eBay’s success, unless eBay gives all of the money back to the a seller, which was collected by eBay and PayPal, as a result of a scamming buyer.
“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,”
Those numbers are disputed since no evidence has been provided to show that eBay actually researched the validity of such claims by those buyers. For instance, did eBay actually research the negative feedback to see if it was justified? Perhaps the buyer received the neg for being a non-paying bidder, or for trying to coerce the seller into falsifying a customs form, or for performing a charge back without sending the item back, or buying an item brand new, using it, and then trying to return it to the seller for a full refund? In all of those instances it would be justified for the seller to leave a neg, however I doubt the buyer would feel that a neg was justified.
Unless eBay can provide proof that such accusations of retaliatory feedback were actually researched for validity in those specific circumstances, then it can not just assume such accusations are true.
On the eBay forums posters often provide just “their side” of the story, which is usually the one that makes them look good. However, when those posting in response actually research the claims, they usually find out the original poster was not telling the whole story, and that the original poster was actually in the wrong. Such experiences show me that eBay must research such claims made by these individual buyers, before accepting them as gospel truth.
However, just for the sake of argument…..If eBay says that good buyers have left eBay due to receiving unjust,negative feedback, then what makes them think that good sellers will remain selling on eBay, in spite of receiving unjust negative feedback? To answer that, let me state that my selling id on eBay is 100% with 4.9, 4.9, 4.8, 4.6 DSRs. I have a 100% seller rating on Amazon too. I have never received a neg from a buyer, nor have I ever given one. However, I have stopped selling on eBay because I will not allow my good selling id, which is the same as my business name, to be smeared by the scamming buyers which eBay has now rolled out the welcome mat to.
DaveyOn 04.22.2008 at 12:05 pm Said:
A lot of these comments get back to the fact that many sellers, myself included, believe eBay has no streed cred when it comes to their own marketplace. They analyze it academically (with defective data), but don’t truly participate in it to the level that their own incentives are based on performing within the parameters set out for sellers.
I still believe every eBay employee having involvement with Marketplace policies and T&S should be required to be a profitable Powerseller in order to get their incentive bonus. The rules would be simple–all DSRs at 4.6 and above for 85 percent of their bonus and 4.8 for 100 percent, their items must be be offered internationally, they should offer Paypal as a payment method exclusively, and be required to run their operation personally. I bet a lot of the tripe coming from HQ now would change really quickly if the management team got some skin directly in the game. Those nagging long-term Paypal system bugs would get prioritized and fixed. What better way to know the marketplace? Much better than just buying shoes there.
Patricia 1On 04.22.2008 at 4:14 pm Said:
Shipping? Where do they have the right to dictate shipping when they gouge at the Ebay store. Case in point - a $6.00 Ebay keychain that cost over $5.00 in shipping and handling and then came in a small envelope with a .53 cent stamp on it. You guys are only kidding when you talk about shipping….aren’t you???? You have to be since your own S&H is one big joke!
MechelleOn 04.22.2008 at 4:27 pm Said:
Do you have that envelope with the postage? scan it and post it - write some articles demonstrating the new dimension of hypocrisy you have learned of eBay. Lets expose their excessive shipping cost practices.
Patricia 1On 04.22.2008 at 5:32 pm Said:
No, unfortunately I don’t have the envelope. It might almost be worth the $11+ dollars to do it again just to get that. The keychain weighed less than an ounce. Oh…and it was shipped from a location just 20 miles from me!
Patricia 1On 04.22.2008 at 5:35 pm Said:
I don’t know what they did with my post - it was here and then gone. I hope they aren’t deleting posts “accidentally” like they do on the discussion boards. No, I don’t have the envelope but I’m sure that’s cut and dried. If anyone ordered the keychain they’d get the same shipping cost and the same envelope with 53 cent stamp because the keychain weighed less than an ounce. I hope this one posts.
MechelleOn 04.22.2008 at 8:26 pm Said:
I’m tempted to get myself one, but I am conflicted with not wanting to give the SOBs anymore of my money. Plus what the heck would I do with it? I could add it as an extra in a package for an all time star eBay buyer LOL.
Patricia 1On 04.22.2008 at 9:21 pm Said:
Well, - if you go to their store and put one in a shopping cart, you’ll see they do charge over $5.00 to ship a $6.00 item that barely weighs one ounce. What would they do to a seller who was reported for gouging like that on shipping? LOL
MechelleOn 04.22.2008 at 10:24 pm Said:
there are not any key chains, but I tried a pack of stickers, but unless I put in all the info it doesn’t show me what shipping will be.
I’ll do that tomorrow and let you know
SandiOn 04.22.2008 at 11:26 pm Said:
Richard, below is the email sellers got today from ebay, I would request you obtain additional information and let us know, as you will note, it is the standard ebay vague:
“Feedback changes to benefit sellers
eBay’s making some important changes to Feedback in May to boost buyer confidence and improve the eBay marketplace. The changes include important protections for sellers against unfair negative Feedback. Negative or neutral Feedback will be removed when it appears a buyer is abusing the system. If you think this is happening to you, report to eBay by using the Contact Us link on any eBay Help page. We’ll also remove Feedback when a buyer doesn’t respond to an Unpaid Item (UPI) report, or if buyer responds but doesn’t specifically call out seller performance, item condition or transaction problems. ”
1. Feedback changes to benefit sellers
Did they laugh when they came up with that sentence?
2. The changes include important protections for sellers against unfair negative Feedback. Negative or neutral Feedback will be removed when it appears a buyer is abusing the system.
What’s the rule, 5%, 40%, when we feel like it? What guideline was written and given to the employees who will be determining this? How many employees have been hired to ensure customer service being timely and responsive?
3. if buyer responds but doesn’t specifically call out seller performance, item condition or transaction problems.
Call me simple minded, but this one is just plain puzzling. If a buyer does not pay, how can they possibly have a valid comment about seller performance, item condition or transaction problems? Most sellers follow ebay/Paypal’s rule - get paid before you ship afterall.
Again, how many employees will now be now reviewing ALL INR disputes, we all know it was an automated system previously, again, can you provide us with the guideline written for employees are responsible for making these decisions.
Look forward to your answers. Thanks Richard!
oakteakOn 04.23.2008 at 6:01 am Said:
Re: the above mentioned email to us
There are najor errors regarding the new Priority Mail charges. The smaller Flat Rate boxes are $9.80 now, not $8.95 It did NOT stay the same as before, it did go up.
This has got to be corrected. I can see that many buyers will be very angry when a seller shows the legit higher rate in their listings. And it could cause loss of sales.
I cannot believe that they sent out this mass mailing with such an error. Just one more sloppy thing after another.
Here is a link to the actual rate increases per the USPS. Maybe someone at eBay could read it and figure it out and then send a corrected email to everyone.
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