Tuesday, September 25, 2007

I Can't Help Myself!

I just can't stay away! eBay Director of On-Site Advertising, Steve Hartman made an announcement yesterday about eBay's on-site advertising and while I don't have much time to comment on it I thought I would highlight a couple of quotes and then direct you to a post I made last Oct.

Steve said:

From the beginning, we've approached on-site advertising with the belief that displaying some types of ads to the right people at the right time would benefit buyers by providing them with greater opportunities to find what they were looking for. By satisfying needs this way, we add value to the overall marketplace and further establish eBay as the first and best place to shop.

Read my post The Real Future of Ebay; After Their Recent Agreements with Yahoo and Google!

Steve Continued on saying:

There are different reasons people use eBay. Some come to browse, buy, sell, and connect. Others simply come to research or have fun. The testing we've done has helped us better predict when providing advertising actually helps as part of these experiences.

I may be wrong here, but who considers Ads as improving the buyer experience. If they created a shopping search engine and added that to eBay then I would believe what they are saying but placing ads all over the site doesn't seem to improve any of the experience (browse, buy, sell, and connect. Others simply come to research or have fun.) BTW, who comes to eBay to have fun

Well that's it for now. I may pop in again.

Remember this is Just my 5 Cents!

Monday, September 24, 2007

I'm Taking the Week Off!

I've become heavily involved in a new project that I will be concentrating on this week. I don't imagine there is going to be any big online news to discuss and since I'm more of a reactionary blogger than a constructive blogger (that was for you Matt) I will probably only pop in with a post if some thing big happens.

While I'm away though I would suggest you subscribe to my What Am I Reading? RSS feed. I will still be gathering information from 100's of sources across the web and updating that feed regularly. Or you can just visit the blog and read the feed as it is displayed in the sidebar.

So I hope to see you all back here next Monday.

PS: I would also like to welcome all of my new readers from Amazon and BBDO, New York. Thanks for stopping by.

Alpha Sellers Wanted!

Online sellers, I’ve just become aware of a new marketplace which you might be interested in. It’s called Aroxo and while they are being very secretive about how their market is going to work, I’ve reviewed the concept with them and what they are planning sounds very interesting.

They are currently looking for sellers to help give them feedback while they build up the service. If you are interested in being one of the first to be let in on the secret, you can register as an alpha seller for the site here: Aroxo alpha trial using the sign-up code “rsseller”. They’ve told me that they’ll chuck in $20.00 of free credit if you do.

I know everyone is getting set for the 4th Quarter but it always pays to to look at all of your options.

Let me know what you think.

Thursday, September 20, 2007

The Growth Bet is On Amazon!

I've spent the last year observing two ecommerce giants in eBay and Amazon and I have to say, from what I am seeing, Amazon has the advantage in this high stakes arena:

  1. They are leveraging their technology and assets to further expand their reach by programs like AWS (Amazon Web Services), FBA (Fulfillment By Amazon) and WebStore by Amazon. While each of these programs is in its infancy they allow Amazon to invest heavily in Technology while leveraging those costs by selling services to thousands of developers and small businesses.
  2. They continue to grow their 3p (Third Party Seller) business which is a high margin business that enables them to manage their own inventory more effectively. They do not need to stock the Long-Tail as deeply as in the past. Why stock 10 Dido CD's when you can stock 3 and still sell 20 through 3P sellers. This approach is as much a sales tool as an inventory management tool. This also allows them to manage their own pricing more effectively.
  3. Amazon knows Online Retail! While eBay knows auctions, Amazon has them beat hands down on the retail side. eBay, is now in the midst of a huge change to their UI and search while Amazon has perfected online merchandising.
  4. Timing is on Amazon's side. Amazon ready for the 4th Quarter - eBay still hasn't released Finding 2.0 and the 4th Quarter starts in 2 weeks.
  5. 3P Sellers are leaving eBay for Amazon. Amazon has plenty of room to grow their 3P business while eBay is trying to save theirs.
  6. Amazon does not have fraud and buyer experience issues. eBay has tons of fraud and buyer experience issues.
  7. You can fin IT on Amazon these days and even get free shipping. IT has moved off of eBay and the S&H charges are excessive.
Sure, eBay Inc. is far more profitable than Amazon but Amazon is still growing while eBay's Marketplace business is stagnant. Amazon invests in new technology while eBay milks the Cash Cow.

eBay is in a "Dip" right now (that's a reference to Seth Godin's book) and I don't see the moves they are making as the way out of the "Dip", mostly because I believe their insistence that the Auction model still has life, is the wrong bet.

Wednesday, September 19, 2007

eBay's "Shop Victoriously" Ad Campaign Sucks!

I'm sorry, I keep going on and on about this new eBay ad campaign but I can't for the life of me believe that this idea was the best option. I wasn't enamored with "Windorphins" but at least the name peaked interest or at least curiosity. I wonder why they didn't continue the Windorphins theme, could it be that their tracking data showed it was confusing and ineffective. I would think, if "Windorphins" was effective they would have continued it. "Shop Victoriously" rolls off the tongue like peanut butter.

I've seen three of the ads so far (included below) and I am completely underwhelmed. The guy who wins the Radio in the "Track" ad looks like he's going to have a heart attack and the "Fox Hunt" ad is just plain stupid. I'm sorry if I'm being harsh but they pay a lot of money for these campaigns and the success of the 4th Quarter is partially dependent on a successful ad campaign.

Look, I want to "win" my item in my jammies, in front of my computer, using a sniping program or setting a bid at my maximum price. I don't want to run, ride a horse or catch the item I want to buy (sorry for taking this literally). Lets brainstorm here for a second about another idea that should have been considered. Why not license "We are the Champions" from Queen and make that the title of your campaign. Sure its been done before but that one phrase conveys the idea much better than "Shop Victoriously". Either BBDO Worldwide has lost their creative abilities or eBay Marketing doesn't have a clue. Just say "Shop Victoriously" three times fast, its almost painful. Hell, 60% of eBay's user base probably can't even pronounce "Victoriously". I myself have miss-spelled it 4 or 5 times in this one post alone (thank God for spell check).

For the sake of sellers on eBay, I hope I am completely wrong about this. I'm not a marketing Guru but even I know you don't use a word "Victoriously" that is hard to speak, spell, or listen to.

I've placed the three ads that I've seen below. Am I way off base here?

"The Track Meet"

"The Fox Hunt"

"The Big Game"

Tuesday, September 18, 2007

Shop Victoriously - Buy It Now!!!!

I'm posting a recent Visa Check Card commercial to make a point:

  1. It's a great campaign and eBay should consider going with TBWA\Chiat\Day for their next campaign and dump BBDO, Worldwide. BBDO has had one hit campaign (IT) and 2 "stinkers" (The current one and last year's Express campaign) for eBay. They had a good thing going with the IT campaign but have missed the mark on the last two.

  2. Pay close attention to the ad and you will see the problem eBay is having with their Marketplace business and why this bet on "Shopping Victoriously" won't pay off.

  3. Hint - Think of the guy with the actual cash as an eBay Auction customer.

The world has passed eBay by. Customers want it and they want it now. More than 40% of eBay's core purchases are either BIN (Buy it Now) or FP (Fixed Price) eBay, is yearning for the good old days and they are gone.

The only way to save the auction business is to create an eBay Classic site and split off BIN,FP and Stores onto the New eBay. Then talk to the folks at TBWA\Chiat\Day about a new Ad campaign.

Shop Victoriously - Get A Great Deal on Belgium (Yeah, The Country)

Belgium, was up for sale on eBay and had attracted a top bid of 10 million Euros before eBay realized it was a spoof and pulled it down. I won't even go into how it could have risen to 10 million Euros before they caught on.

The details are as follows according to TheAge.com an Australian website.:

"Belgium, a kingdom in three parts" was posted on the Belgian eBay site as offering "plenty of choice" despite the caveat that it comes with "300 billion of National Debt".

Offered in three parts - Flanders, Brussels and Wallonia - the accompanying blurb said the kingdom "can be bought as a whole (not recommended)".

The vendor also included as added extras "the king and his court (costs not included)".

Maybe eBay should have created a TV Ad where the Worlds Dictators and Despots were running around a track chasing a Waffle (Belgium Waffle) That would kick in those Windorphins.

Monday, September 17, 2007

Amazon Gots Widgets!

Amazon has gone Web 2.0 with their affiliate program with the introduction of Affiliate Widgets for blogs, websites etc. Like the Product Cloud in my sidebar underneath my Profile. Here are some other examples that I've put together:

Slide Show:

New Unbox Previews:

I'm certainly interested in finding ways to monetize my content and who knows maybe this will work. Amazon, like eBay is reaching out with Distributed Commerce tools like Widgets to find new customers where they hang out.

Thursday, September 13, 2007

Scot Wingo Speaks!

Scot Wingo was part of the Bear Stearns conference call today and made some great points about the data he is seeing regarding eBay. According to Wingo, the "eBay portion of CA's business in the 3rd Quarter is growing at about a 9% clip Y/Y" which seems to mirror eBay's own GMV growth. Though this growth rate was in stark contrast to last year where CA saw Y/Y growth in the 3rd Quarter of "19 or 20%". Scot did go on to say that eBay was a drag on the overall business. (or something close to that).

I commend Scot on his strategic choices and the fact that CA often executes their initiatives flawlessly and I can't see any downsides to the purchase of Marketworks. It does feel to me that it was a move brought about by timing and market conditions and unlike the big companies I talk about regularly they acted quickly and decisively.

I often comment on posts from some of my favorite eBay blogs like Tamebay, Auctionbytes, OnlyeBay and Trevor Ginn's blog and was surprised to see Scot comment on Trevor's blog with the following comment.

Hi Trevor,

Thanks for covering the story. We plan on keeping the MW platform. As you point out, customers are ‘telling us’ that there’s a need for a robust £20K side of things with Merchant. Thus we see this as a great way to provide a “cradle to adult’ solution for sellers that are ramping their business and want a clear path to further growth on and OFF eBay.


Its good to hear Scot come out and say they plan on keeping the MW platform as a “cradle to adult’ solution to CA's Merchant Program. BTW, I love how he capitalized OFF eBay.

I would be curious though, to hear what they plan on doing with CA Pro and the smaller Sellers coming on board from Marketworks. CA has never really put much of an effort into the small seller so I'm not quite sure what direction they will take with that segment of the business. Maybe Scot will drop on by to leave a comment.

I have fond memories of starting my business using Scot's original eBay solution called Auction Rover and then moving to CA Pro. I was also one of the first users of CA's Merchant program.

ChannelAdvisor is a great company being run by some great people and Scot is a visionary even though some at eBay call him "Wingnut".

Bear Stearns Conference Call Today With Scot Wingo

Just thought I would give you a heads up in case you are available around 2:30PM EST. This should be quite interesting.

Bear Stearns Internet Conference Call...

eBay: Recent Changes and the Impact for 3Q and Beyond

hursday, Sept 13th 2:30pm ET - Hosted by Robert S. Peck, CFA

Featuring Industry Veteran

Scot Wingo
, CEO of ChannelAdvisor & Steve Grossberg, Internet Merchant Association

is a leading provider of auction and marketplace management software and services. Clients include: IBM, Sears, Dell, Motorola, Sharper Image, as well as eBay’s top SMB sellers.

The Internet Merchants Association (IMA) is a nonprofit trade association for companies involved in internet commerce. The Association was founded to provide our members with a voice in the ever-changing world of e-commerce by providing education for all levels of business.

Topics to be Addressed:

What are the recent changes eBay has been making?
How will these changes impact the metrics?
What’s the impact of the listings discount?
Will eBay be successful in reinvigorating growth?
What do you think of Finding 2.0?
Current Views on PayPal?
Adoption of Google Checkout by clients?
Feedback ratings impact by “neutrals”?

Dial In: 1-800-683-1535 (domestic); +1-973-633-6740 (outside US); Passcode: 9229654

Replay through 9/20: 877-519-4471 (domestic); +1-973-341-3080 (outside US); Replay Pin: 9229654 Replay available thru 09/19/07

Fun Little Facts About My Blog Utopia!

The nice thing about being a small little blog, is that I have time to check my stats 3 or 4 times a day (okay, its more like 3-4 times an hour). I noticed a curious little trend this morning following my post about the ChannelAdvisor acquisition of Marketworks. Activity from Salt Lake City, Atlanta, GA (and surrounding cities) and Raleigh/Durham has increased, in some cases 500%, over the day before.

Curious that:
  • ChannelAdvisor is in Raleigh/Durham
  • Marketworks is in Atlanta, GA
  • Infopia, is in Salt Lake City
I'm still waiting for an increase in activity from San Diego (Zoovy) and surprisingly, activity from my number one referring network eBay has not increased substantially. But then again, it isn't even 9:00 am yet on the West Coast.

This is so much fun. I love news like this, it keeps things interesting. Stay tuned for more speculation on what this acquisition says about the future.

In Other News! Super D buys MSI Music

This news will only be of interest to a few of my readers who are in the Packaged Media business, like some of my former competitors in the eBay media category.

A rumor surfaced yesterday that SuperD, a DVD and CD distributor based in Southern California has purchased MSI Music, (according to their website the largest importer of recorder-music in the states). MSI is based in Florida. This purchase has been rumored in the past but in this case I do have confirmation that the purchase has been made but no details have been disclosed.

This acquisition creates a virtual monopoly for Super D in the imported recorded music business, basically the last high margin media business left. Look for more consolidation in the DVD and CD distribution ranks in the next year or so.

Update: Heres a notice from Billboard.biz Also, I've "heard it through the grapevine" that they are closing the Florida warehouse. I'm sure they will keep a sales office on the East Coast.

Wednesday, September 12, 2007

ChannelAdvisor Acquires Marketworks! Spelled Correctly.

Bloggers need to learn to spell. Or, more accurately, bloggers need to proof their posts. I just finished a post this morning about the ChannelAdvisor acquisition of MarketWorks and I separated ChannelAdvisor into 2 words and miss-spelled acquisition in my title (I left out the c).

No wonder I wasn't getting any hits on the post -- they should have been pouring in. A lesson learned.

Note to self: At least proof the Title then Google will show your post.

The Sheen Is Coming Off Apple!

Recently, I wrote a post about Apple making their first mistake regarding iTunes by letting NBC move to Amazon (Amazon gets my vote for the go-to company of the year). I had kind of overlooked another big Apple mistake -- because I'm just not an iPhone guy.

With the recent announcement of a $200 price reduction for the iPhone, coming so soon after the launch and the PR problems that move created, I think I see signs of a growing disease affecting many large respected corporations -- Arrogance.

Steve Jobs has never been considered a humble guy and this characteristic has served him well in the past but occasionally this my-shit-doesn't-stink attitude gets in the way of seeing potential problems or at least in giving them the attention they deserve. I think Mr. Jobs thought the iPhone was a slam dunk as did many others -- I didn't care either way. This attitude may have gotten in the way of seeing the downside and I'm sure it got in the way of Apple's negotiations with NBC. Digital downloads do not have the same financial impact to NBC as Pixar had to Disney. You can't play hardball with a company when the numbers just aren't there.

Steve Jobs, is not alone. "Corporate Arrogance" has played a major part in bringing many, once flying, companies back to earth. eBay is experiencing it now; Microsoft went through it in the Anti-trust days; Yahoo experienced the effect when it decided not to purchase Google or Facebook originally.

Note to company executives that think their shit-doesn't-stink: It smells the same as the rest of us and a little humility will take you a lot father down the road.

On a side note: When I first started selling DVD's, I sold an out-of -print classic to Steve Jobs, from my Amazon account. It was in 2001, I believe and I can't remember the title, but it was a classic film. Just thought I would tie this post together with a personal aside.!

ChannelAdvisor Acquires Marketworks!

Auctionbytes announced today that ChannelAdvisor has acquired Marketworks for an undisclosed price. Both companies have been vying for the top eBay Seller business for years.

According to Auctionbytes; "ChannelAdvisor will keep over half of the Marketworks staff in areas such as technology, brand services and customer service. Marketworks CEO Doug Hadaway and others on the management team will stay only a few weeks to help during the business integration.

Prior to the acquisition, ChannelAdvisor had 20 percent of the market share of eBay's largest sellers, Wingo said, referring to Titanium PowerSellers selling $150,000/month and more on eBay. With the acquisition, he said the company will have a 30 percent share of eBay's Titanium-level sellers. "That was one of those things that drove our thinking."

The rest of the details can be found at Auctionbytes and at Marketworks

I think this purchase was more of a case of pouncing on an opportunity rather that a strategic decision, though with eBay's marketplace slowing down CA may have found it more difficult to grow their business. It is possible that Marketworks executives
[more appropriately investors] were looking for an exit and it made sense to work out a deal with the #1 company in the eBay space. I certainly don't believe that CA pursued Marketworks. It must have been one of those deals they couldn't pass up.

The acquisition will increase CA's valuation going forward, help them with the struggling WebStore side of the business and solidify their position in the marketplace business. Integrating the two companies may prove to be a chore but CA has shown its ability to integrate acquired companies in the past. Major Marketworks companies like Adam Hersh and eForCity will now become part of the CA family.

What is clear; this will be a blow to Salt Lake City based Infopia as CA gets stronger. Look for a possible marriage between Zoovy and Infopia in the near future.

One last point, that may have been overlooked. This acquisition and possible further consolidation in the space are definitive signals that eBay is slowing down. Marketworks, may have seen their growth hit the ceiling and decided this approach was one of a few options. I certainly don't think it is a sign that the eBay Marketplace is healthy. A few years ago eBay could support many large service providers and sellers; not anymore.

Update: I forgot one thing and thought of it while taking my shower this morning (sorry for that visual) This acquisition does speed up CA's trajectory towards going public, so in that respect there are some strategic benefits. (I still don't believe that was the motivation). I guess now. I will have to begin speculating on the moves CA is making. That should please my eBay friends. Of course now Wingo will stop answering my emails.

Monday, September 10, 2007

10 Reasons Why Meg Whitman will Leave eBay by Q3 '08

No, this is not a rip-off of Letterman, mainly because I couldn't think of 10 "funny" reasons why I think Meg is leaving. I'm just observing what is happening in and around eBay, taking into consideration outside influences (Mitt Romney), considering Meg's own statements, adding a touch of options exercising and throwing it all into a pot and stirring it together into one list. I certainly don't think it is a foregone conclusion that she is leaving but I think it is becoming clearer that the wind is blowing in that direction.

IMO, there is a perfect storm building for her to make a change and because she is the "very" public face of a "very" public company, with thousands of employees, hundreds of thousands of investors and millions of buyers and sellers, her leaving would be A BIG DEAL!

***Warning, this is pure speculation***

If you read this post and it doesn't make sense or seems far fetched then tell me why. If my speculation has merit then we won't know for a year. If it has no basis in reality, it will die like so many of my other posts.
  1. Meg's own words set the stage for a change; the following quote comes from an interview of Meg for the San Francisco Chronicle, back in November of 2006:

    Q: You said in the past that a CEO should probably serve 10 years. You've served eight. What are your plans? Will you follow your own advice?

    A: The first piece of advice I wish someone had given me as a freshman CEO is to keep your mouth shut. Somehow I didn't get that advice, which is don't talk about when you're coming or when you're going because it just creates a set of questions that probably aren't productive.

    Her response was: she should have kept her mouth shut, not that her position regarding a CEO only staying on the job for 10 years, had changed. (She has perfected "eBay Speak" since her freshman year as CEO)

  2. She is very close to Mitt Romney, and is National Funding Co-Chair of 2008 Presidential Campaign. If he gets the Republican nomination for President in the Spring, look for her to become more active in his campaign. I certainly don't believe she would leave eBay to work on his campaign but if he is elected President I would think that a Cabinet Post would be too hard to turn-down. Put this reason down under outside influences that might affect her decision.

  3. Within the next 6 months, the current Buyer Experience initiatives will be in full effect and the changes will have become a huge part of her legacy. If the changes are effective and turn-around the Marketplace business, she could go out on top. If the changes don't fix the problems then investors will start to grumble even more than they are now and there will be a call for change. Either way, I see a change coming.

  4. She has begun to exercise her stock options. While this may just be personal financial planning, the timing is certainly intriguing and leads to speculation (which gives me something to write about).

  5. The problems are mounting: Amazon is targeting Sellers, Skype is stuck in neutral, China failed, eBay US and eBay Germany are stagnant or declining and there are no easy fixes. If she can't come-up with solutions to fix each of these businesses then the Board of Directors will find someone who can.

  6. Remember this is speculation: I think eBay is getting ready to spin off all or part of PayPal. This move would solidify her management legacy and take attention away from the problem children: Skype and Marketplaces. Look for her to move on after a successful spin-off of PayPal.

  7. Dealing with angry investors, sellers, buyers, lawsuits, the press and bloggers has got to take its toll on a person, even a Super CEO. I can't imagine with all the negatives facing eBay at the moment that she has not at least developed an exit strategy.

  8. I wasn't going to bring up any personal reasons but I needed to get to 10: Her kids are grown and there are few family reasons to stay.

  9. She doesn't need the money and she hasn't stayed at a job for longer than 3 years since Bain & Company (8 years) in the early 80's. History does tell us some things.

  10. The challenge of growing something is much more enjoyable then the challenge of saving something (at least for most people). Leadership at the top needs to change to reflect the changes in the Marketplace. It is time for a change.
There are a few things that I believe might keep her at the helm for the sort-term.
  1. Mitt Romney's Campaign never gets off the ground (that was an attempt at humor).
  2. eBay merges with Yahoo.
  3. eBay makes a huge acquisition (like Facebook).
  4. They don't spin-off PayPal.
So, if I was a betting man, I would say that there is a better than 50% chance that Meg will leave eBay in the next 6 - 12 months.

Just my 5 cents!

Wednesday, September 05, 2007

Apple iTunes First Mistake.

Apple has been on a roll with its iTunes Store and downloadable music and was positioned to do the same with video, until NBCU wanted to change the deal. Now 40% of iTunes video download business has moved over to Amazon at the same price of $1.99. This could be the first chink in the iTunes armor. Steve Jobs, you aren't in Kansas anymore.

iTunes management, thought they had leverage over NBCU because of their 76% market dominance, so there was no need to negotiate -- their arrogance may have cost them. While nobody can touch iTunes in regards to music downloads, video is another story altogether. Studios and Networks play hardball while the Music labels play catch-up.

Reportedly, NBCU wanted to double the price of their downloads and iTunes said no. Well, apparently that was just a starting point in negotiations because when NBCU moved over to Amazon they agreed to the same pricing as they had previously with iTunes.

" NBC believed it was in a strong position to negotiate for new iTunes deals, accounting for a reported 40% of all iTunes video downloads, the No. 1 supplier of digital video to the service. But iTunes, which holds a gigantic 76% of the market, wasn't interested, believing it would create a confused marketplace when it comes to pricing. The retail price of an iTunes TV show, as it has been since the service's launch, is still $1.99. For movies, iTunes users pay $9.99."

There wasn't much risk on NBC's part in taking the hard line because the revenue from Video downloads is minuscule. It's better to make the move in the infancy stage rather than after you've helped iTunes build their video download business. So, now we will see if the market follows the content or the marketplace. My bet is on content.

NBCU said in a statement that Apple's intent with iTunes isn't really to help its content providers, but itself. It's clear that "Apple's retail pricing strategy for its iTunes service is designed to drive sales of Apple devices, at the expense of those who create the content that make these devices worth buying."

Stay tuned as other Studios and Networks follow suit. If video downloads were a larger share of their revenue many would stay but the risk of moving is minimal and Amazon should working aggressively to pursue deals with the other Networks and Studios. Strike while the iron is hot.