One reason I like being a blogger; I can analyze and speculate to my hearts content. My analysis comes from observations of the market, available data, sources that know real details and basic logic. When I speculate, it is more based on a gut feel then anything else and my gut can be wrong. I recently speculated that eBay would raise Store Fees this year but all signs point to me being wrong in that regard.
A year ago, eBay made an All-in bet – Texas Hold-em style – on CORE over Stores and up till now the jury is still out on the move. eBay’s stock price is hovering around $34 a share which is more of a signal that investors like its balance sheet and the fact it is buying back stock, rather than that they see much potential.
Many problems still exit in the marketplace business, especially in the top 2 markets: The United States and Germany. CORE listings are declining or flat in the top 2 markets. eBay Express is struggling to gain traction, new “finding” functionality on eBay.com is a huge gamble as eBay users are notorious for liking things the way they are. The Media category on eBay is broken and something radical must be done to save it.
It is clear to me that eBay chose to protect the cash cow business of Auctions over Stores because Stores were less profitable but the decision was to protect a maturing business over a growing business. It is much easier to circle the wagons to protect CORE rather than to take the aggressive approach of growing Stores, this risk aversion will come back to haunt them (that’s a little speculation).
It is clear that investors are sitting on the sidelines in regards to this stock and in fact Billionaire George Soros just sold his entire stake in eBay to double-up on Microsoft. eBay is generating tremendous profits right now on the back of PayPal and International Business but it is losing ground to ecommerce as a whole rather than breaking ground on new ideas.
In my view, Stores should have been the future of eBay, and management should have taken the short-term hit in stock price to once again become a growth company but that would have taken some vision. Better to make the hard choices when you have options instead of waiting until it is imperative.Just my 5 cents!