eBay Inc Reports Fourth Quarter and Full Year 2008 Results

DaveyOn January 21, 2009 at 9:23 pm Said:

It is a shame, that when ebay’s marketplaces should excel–a down economy where people are searching for bargains–it didn’t. Why not? Buyers should be flocking here looking for the best pricing on new and used items! Where are they? How many unique small sellers did the marketplaces lose, who took their items with them?

Also, the shipping cost “decrease” is no highlight whatsoever, or a disingenuous or spinny one at best. Since USPS, UPS, and Fed Ex never bought into “free shipping,” a more honest way to say it is that “Buyers’ total procurement costs went up, not only as seller fees rose up to 67 percent, but as sellers rolled more of the shipping cost into the item cost, and added the additional fees we take on the difference.” Not good press, but brutally honest. We need more honesty.

BobbyOn January 21, 2009 at 9:53 pm Said:

Ha-ha, ha-ha, ha!

[Sentence edited: See Comment Policy]

Remember folks, it’s not the economy. It is the Best Match search fiasco, lowering listing fees yet outlandishly raising final value fees, the unfair DSR ratings scale, 21 day PayPal holds, and sellers no longer able to leave negs for bad buyers. Yep, and then some.

ebay has alienated buyers and sellers. Sellers are buyers.

At the begining of 2008, my weekly Buy It Now STR was 75%. As the policy changes rolled through under the JD regime my weekly STR slowly dropped down to 35%! AND I have 100% feedback and my past and present 30 day DSR’s averages are 4.9, 4.9, 4.8 and 4.8; am I doing anything wrong? NO. JD is.

Concha CastanedaOn January 21, 2009 at 10:02 pm Said:

I wrote an eBay guide about “Disruptive Innovation” Please read it and vote (cry).

BobbyOn January 21, 2009 at 10:08 pm Said:

@CONCHO CASTANEDA

I couldn’t find your eBay guide about “Disruptive Innovation” on your blog site. Do you have a link?

MarcOn January 21, 2009 at 10:57 pm Said:

Things I have noticed about ebay.com:

1) A good majority of users of ebay.com have been BURNED- if not many times. Whether it be by a seller, Paypal, ebay itself, or a buyer.

2) A large percentage of occassional sellers were also buyers. Once these small sellers are excluded from the marketplace (21 day holds, restrictions,DSRs, etc.) they are not buying. They now have a distaste for ebay. Most likely, won’t be back- and they will tell their neighbor, friends, siblings, etc.

—-> As a result ebay is decaying or already dead in the minds of THOUSANDS of consumers! Ebay needs to awaken to the fact that it is much more cost effective to retain an existing customer than it is to acquire a new one.

Note to ebay: WORD OF MOUTH ON THE STREET IS KILLING YOUR BUSINESS!!!

MarcOn January 21, 2009 at 11:09 pm Said:

Just to clarify:

THE STREET = MAIN STREET

P.S. if you need anymore advice Donahoe send me an email. I’m running a special: FREE advice.

unknownOn January 22, 2009 at 5:14 am Said:

When you’re an average joe and do a search using ebay’s default search (what they call best match), you scroll through the first page search results and come to a list of ads for other websites. After that they’ve buried all the other pages containing listings on ebay – but by then the buyer has gone to one of those other websites to buy their item.

YOOOHOOO! If you don’t want people to leave, don’t push them out the door.

Unless that’s the intent… And if that’s the case, then ebay has been very successful under JDs leadership and should be giving him a big raise or bonus for accomplishing what had been considered the impossible – destroying a totally legal monopoly and deflecting sales away from ebay to other websites.

The reality is ebay should be soaring right now with the economy as it is. The economy isn’t the reason for ebay’s problems.

ur_bringing_me_downOn January 22, 2009 at 5:59 am Said:

What part of “ebay posted $8.54 billion in revenue in 2008″ don’t you all understand? What is wrong with billions of dollars in revenue in a down economy?

Ebay remained the number 1 e-commerce site for the 2008 holiday season in the US, UK and Germany in a global economic slump.

Hello- anyone home?

DaveyOn January 22, 2009 at 10:32 am Said:

Yes, UR, we understand what you believe you understand.

What you may not understand here is that revenue does not matter. What matters is income, earnings per share (down 31 percent), revenue growth, and market share (shrinking). Heck, even GM still has great revenues if you want to look at it that way.

As I said, ebay should be doing better in a recession if they had understood and valued the marketplace before it was seriously disrupted. They didn’t and aren’t. I’m just as confident as JD in the direction they’re going, if that direction is downwards. Hopefully those Diamond Powersellers will help attract that buyers, at retail prices. NOT!

Now, let’s compare to earnings of other companies that should do better in recession. WalMart? Revenue up 7.5 percent y/y in 4th Q. Amazon? Earnings of 27 cents per share versus 19 last year.

Clearly things aren’t working as planned. Seller input is being ignored, which is the best market intelligence they could have. When they have to point out disingenuous stuff like how much they “reduced” shipping for buyers as a talking point, they’re reaching for straws.

“We talked, they didn’t listen.”

Concha CastanedaOn January 22, 2009 at 11:15 am Said:

For Bobby

Disruptive Innovation: The wrong tool for the job.Posted Jan-15-09 09:47:55 PSTJohn Donahoe’s (EBay CEO) interjection of “Disruptive Innovation” into the Ebay business model may go down in history as one of the biggest abuses of this theory, not to mention the biggest blunder for the health of the company. At the time of this writing Ebays stock is falling at a faster rate than the whole stock market.

We all agree that the “theory of disruptive innovation” can be revolutionary. For instance the invention of the digital camera has replaced cameras that use film. The firearm replaced slings and arrows. These are examples of inventions that replaced earlier inventions. These inventions were disruptive innovations.

So what is different about Mr. Donahoe’s assumption that this theory is good for the eBay marketplace? He overlooked the basic fact that eBay does not own the product (items) that is for sale in the first place. The product is owned first by the seller. He has also overlooked that his sellers were also his buyers. So there is no better mouse trap to replace the old mouse trap. Instead he has caused his sellers to leave, and their items. So he has replaced an old system that was working with a system of nothing for sale worth buying, and nothing to buy worth selling in this sort of system.

Perhaps the most disturbing aspect of disruptive innovation interjected and imposed on eBay marketplace at this time…is his timing. Getting everyone to buy and sell through electronic means only is arrogantly assuming that the power grid, credit, and the economics of growth, are all going to be ongoing and fluid. Of course that is absurd and completely out of his control. Indeed any one of the three that becomes absent will disrupt his “disruptive innovation” model. I am once again reminded of an old shopman’s rule that you don’t actually know how to use a tool until you are ready to name at least three ways it can be abused, and at least three situations where it’s the wrong tool for the job! For more information on the Theory of Disruptive Innovation see Wikipedia.

I wrote this guide a while back and you can vote on it. My username is skymetalsmith.

AmberOn January 22, 2009 at 12:27 pm Said:

What is wrong with billions of dollars in revenue in a down economy?

The fact that eBay Marketplaces (you know, the area where eBay sellers make their money) tanked. Badly. Paypal is keeping this boat afloat.

Oh, and that some of that revenue should have been used to help the extremely SLOW technology on the site.

CandyOn January 22, 2009 at 9:33 pm Said:

“Ebay remained the number 1 e-commerce site for the 2008 holiday season in the US, UK and Germany in a global economic slump. ”

Hmmmm….I thought I heard Ebay down 31 percent in the 4th quarter. Amazon: “our best holiday season ever”

Isn’t that what I heard?

Dan BuchannonOn January 24, 2009 at 8:46 am Said:

Your commenters remain very much the disgruntled small sellers who focus only on your legacy auction business. I’ve been pretty critical of some changes management has made, but it’s clear that most of the Street and media haven’t yet looked at what Ebay Inc. as a whole with all of its revenue streams. I still believe all these changes to core business had to be made — probably 2 – 3 years ago. And if you look at what the company (not ebay.com) would be financially minus PayPal, Skype, StubHub and classifieds it’d be a true mess. No one seems to see that minus these businesses that is about $3 BILLION less in sales annually. THREE BILLION DOLLLARS less.

Keep up the good work, Richard. Don’t let the complainers keep you from doing what you have to do.

Cheers,
Dan

GailOn January 24, 2009 at 10:24 am Said:

Thank you, Richard. You did a good job Twittering the earnings call. Here’s your beer! :-)

Jose MallaboOn January 25, 2009 at 9:38 am Said:

@ Candy – Thank you for your question/comment regarding that point we made in our earnings release. The data behind that point is Nielsen unique visitor traffic for October, November and December across the US, Germany and United Kingdom. Based on that aggregate unique visitor figure, eBay was the number one e-commerce site. We choose those regions because they are our top revenue and GMV markets for eBay.

However, if you look at comScore figures published just 2 days ago eBay was number one in unique visitors globally for December. See this link http://www.comscore.com/press/release.asp?press=2696

No doubt it was a tough quarter and the economy continue to erode consumer confidence, the business model as a whole showed relative stability and strength — driving more than $500 million in cash flows for Q4.

Going back to the point you asked about with unique visitors and the holiday, this is made more interesting as we made a strategic shift away from mass marketing to drive customer acquisition to focus more on buyer and customer loyalty programs.

We think these metrics are important to show our reach across the still growing e-commerce market, but as we also stated our long-term focus for eBay is sold items across these and all of our markets.

Sincerely,

Jose Mallabo
Director, Financial/Corporate Communications
eBay Inc.

TonyOn January 25, 2009 at 3:40 pm Said:

I’ve been thinking about selling the odd item or two again on ebay for almost twelve months now, but everytime I go to the site I see another change that gives me absolutely no confidence in the management.

As others have pointed out, sellers also buy, I know I did when I sold their previously. I buy the odd thing or two now on ebay but I’m nowhere near as involved as I once was and I have absolutely no intention of spending my time and effort trying to make a few quid on the side with a company who keep making it clear by their policy decisions that they don’t want small sellers.

Actions speak far louder than words, I can assure you and the actions of ebay’s management have certainly spoken to me.

CandyOn January 25, 2009 at 8:48 pm Said:

@Tony – I tend to agree with you. I didn’t really realize it but when I sold on Ebay the money would accumulate in my Paypal account and I found myself buying (sometimes by impulse) on Ebay because the money was there and handy. I realize I just don’t do that anymore because I’m not selling there and just don’t have that spare money. You do have a point.

CandyOn January 25, 2009 at 8:50 pm Said:

Well…either my post was gobbled up by the internet monster or I’ve been barred from posting truthfully here LOL

CandyOn January 25, 2009 at 8:52 pm Said:

I’ll make this short since my posts aren’t going thru. Tony – I agree with you!

AmberOn January 26, 2009 at 5:14 pm Said:

we made a strategic shift away from mass marketing to drive customer acquisition to focus more on buyer and customer loyalty programs.

Yep, Jose, you did. To your detriment.

I even saw the transcript of the earnings call where an analyst asked about this very thing and received, quite frankly, a very entertaining tap-dance and standard non-answer.

Currently, eBay is doing absolutely nothing to lure people to the site. NEW ebayers that is. Nor are they really attracting people who have signed up as members then either forgot or decided to give up.

Television ads remind people about the site. Coupons and loyalty programs only work for people who already shop here. And I’ll bet that instead of increasing the amount of money spent, they simply substituted those coupons for what they would have spent anyway.

Television ads bring in buyers who may not normally think about Ebay as an alternative to the mall…people who DON’T spend a lot of time online. People who aren’t going to be using Live Search (way too complicated for many older shoppers), who aren’t going to be reached by the keyword purchases and banner internet ads. People who aren’t going to be listening to the radio ads–because in rural America (where I happen to live) radio has little to no presence.

Ironically, the people in my area spend a LOT of money on catalog and internet shopping per capita. A LOT. Why? Because we don’t have a Walmart. We don’t have a mall. And our demographic isn’t unique.

Ebay made NO attempt to reach any of the rural Americans like me.

Skipping TV ads didn’t look like you were being smarter with your marketing budget. It made you look cheap and desperate.

And, just to sum it up for you, traffic means nothing if those visitors aren’t translating into buyers. So being #1 in unique visitors is worthless unless those visitors buy HERE. They didn’t.

DaveyOn January 30, 2009 at 5:39 pm Said:

Amber,

What drew buyers and sellers to ebay, besides Pierre’s initial spamming of USENET, was purely word-of-mouth accolades. Ebay was exploding before they ran their first media ads, including the infamous “IT” campaign.

What do you think that on-the-street word-of-mouth advertising is saying about ebay now? What is ebay doing to counter that? Besides punishing small sellers, that is, which hastens the bad advertising. What do you say to your friends when you sell something here for the first time and get a 21 day hold, or your listing taken down by a VeRO member?

One official comment I’d like to see is a comparison of Amazon’s 4Q results with ebay’s, which proves it isn’t “the economy.” Resale and discount houses are doing really well in this environment. I would’ve thought that ebay would be booming. They’re not? How about disruptively innovating back to what they were in the early 2000’s?

IR2.0 Social Media for Information Equality « B2B Marketing Savvy: ScoopDog's BlogOn September 28, 2009 at 1:38 pm Said:

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