Thursday, May 31, 2007

Another Jim Cramer Pipe Dream - A Yahoo/eBay merger.

This is the Motley Fools take on Jim Cramer's not so original idea for a merger between Yahoo and eBay. I agree with the premise that this would be a wise marriage for investors and also for online sellers, though having eBay's marketplace management running Yahoo Small Business doesn't appeal to me. I don't see it happening unless eBay's stock drops substantially. IMO, Yahoo would make the deal right now but eBay doesn't see the need . A $28 share price would change that in a hurry.



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Tuesday, May 29, 2007

More eBay Brain Drain!

I just learned that Dan Madden, former PayPal Seller Development dude (I don't really think that was his title) has just left PayPal for a position with AdBrite. Many sellers have worked with Dan over the years and I'm sure they join me in wishing him well at his new position.

I've written several eBay Brain Drain posts over the last year and left it up to readers to read between the lines but no longer. I believe the changes at eBay since 2005 were brought about by a management battle for the direction of eBay and the consultants won.

I can understand one or two good people leaving for better opportunities but the list from eBay is growing daily. There has been an exodus of very good people since 2005 when John Donahoe was hired to run eBay's Marketplace business. Employee morale must be very low right now. Might we one day see the eBay version of Yahoo's Peanut Butter memo.

I have spoken or communicated via email with many of those people. Some of them are guarded as to the reasons they left while others just wanted a better opportunity. It looks like eBay's old guard has left the building and in my opinion so has the heart and soul of eBay.

eBay is now run by consultants like John Donahoe who manage strictly by the numbers and have no connection to what made eBay great.

Note to eBay buyers and sellers, if you wonder what happened to the old eBay you knew and loved ... its working for other companies.

Former eBay Exec Jeff Jordan Surfaces!

According to Reuters, beginning June 4th, Jeff Jordan will become the new CEO of OpenTable Inc., an online dinner reservations site. Jeff is a great guy and will be a wonderful CEO. I wish him well. Here is a link to the Reuters story.

UK Sellers Boxed In by eBay Global-Trading Policies

Ina Steiner discusses the changes eBay UK sellers are facing in regards to selling on the US site. Great post!

read this post

Sue Bailey at Tamebay.com also has a very interesting post about some visibility tests being conducted on UK visibility on the .com site.

read this post

The Power Of Bloggers To Affect eBay’s Stock!

I wouldn’t imagine that many eBay bloggers believe in their individual power to affect eBay’s stock price, either positively or negatively but in the aggregate there may be some validity to the concept.

eBay is an unbelievably profitable company with a fantastic balance sheet and they consistently exceed analyst’s estimates on earnings quarter after quarter. eBay is buying back stock and investors have already priced in the Skype purchase -- more like written it off. So, why is the stock having a hard time staying above $34 a share? In fact, even after a stellar first quarter earnings report eBay’s stock price hardly budged. While Amazon, on far less profit sees their stock skyrocket.

Do bloggers have any influence? I think the case can be made that bloggers in the aggregate can have a major impact on a stock price. Stock analysts are now quoting Bloggers and Blog rumors and scoops can have a temporary impact either up or down on a stock price. Investors are seeking out information -- the inside scoop -- on a particular stock, to give them an edge. Sure, this information has to come from a reliable informed source but if the sentiment of a majority of blogs dealing with a particular stock has a bearish tone it may have an impact on the stock price. This has got to really tick off management since they can't control the message. I know this is the case with eBay’s management -- inside info here.

In eBay’s case the sentiment of most bloggers covering the company is bearish IMO, therefore the stock is having a difficult time gaining any upside traction. I don’t think any one blog can cause this phenomenon and certainly many blogs are poorly written or pure speculation – I don’t speculate I analyze -- but when you have hundreds if not thousands of blogs saying the same things it is bound to have an impact.

Investors, if you want to get a feel for the direction of a stock, pay close attention to the chatter in the Blogosphere it may give you an edge.

Just my 5 Cents!

Monday, May 21, 2007

Reading The eBay Tea Leaves! eBay 2.0

I am starting to get a fix on the new eBay, eBay 2.0 if you will. Auctionbytes.com just posted about the changes coming to eBay in the coming months and I think this provides a glimpse of the future of eBay.

  • eBay to Serve Targeted Ads Based on Users' Information

    Well, it looks like my prediction of last Oct --
    The Real Future of Ebay; After Their Recent Agreements with Yahoo and Google! -- is coming to fruition. eBay is now becoming a Product Search Portal and marginalizing their sellers. eBay management wants to control the buyer experience and it looks like they are moving away from relying on their GMV based business. In fact eBay looks like it wants to become "Google for Shoppers". Tough sell, because in order to do this they need to alienate the core of their marketplace business. I see this as a very bold gamble. I'll have to ask my stock analyst buddies if this move would be cheered by Wall Street or not.

  • You Blog It, eBay Owns It (too), Says New User Agreement

    "eBay has always claimed rights to auction descriptions, and in fact, it grants its affiliates permission to republish them. Now, in addition to content areas such as seller listings, feedback comments, "About Me" profile pages and discussion boards, eBay has numerous Web 2.0 content areas, allowing buyers and sellers to write reviews and guides and publish blogs and wikis. Not to mention videos embedded in eBay listings."

    By being a member of eBay, users now grant eBay a content license that reads, "When you give us content, you grant us a non-exclusive, worldwide, perpetual, irrevocable, royalty-free, sublicensable (through multiple tiers) right to exercise the copyright, publicity, and database rights (but no other rights) you have in the content, in any media known now or in the future."

    So now even user's original content is free to eBay to do as they please. eBay uses that content to improve natural search and will soon be adding sponsored links to eBay, blogs, wikis, guides and My World pages. (This last statement is speculation on my part but is the logical conclusion to their current efforts)

  • Make money by directing traffic to eBay.com

    eBay has ramped up their efforts to get users to drive traffic to eBay by allowing sellers to get paid to drive buyers to their own listings. Note to Sellers: If you are going to drive traffic to anyone it should be your own WebStore not eBay. My suggestion, don't do eBay's work for them unless you want to stop selling actual product and just become an affiliate marketer. If you make money by selling a real product then take control of your business and move away from the control of eBay.

On the pure speculation front: I am beginning to see signs that eBay is considering changing their SIF format to a no listing fee higher FVF format with control over S&H. Their continuing troubles with the Media Category and their desire to control what buyers see makes this move a near certainty but I have no hard evidence to prove my point -- yet. The signposts are there, though. If eBay does not charge listing fees for SIF then they can control the product that buyers see ala Amazon and similar to what they are doing on eBay Express, therefore giving them more control over the marketplace. In fact SIF may just become EIF (Express Inventory Format) with Express listings being served up on the .com according to an algorithm of eBay's choosing. I don't see any signs that they will stop charging listing fees for Core items.


Note to Store sellers: If you have not begun to look for alternatives to eBay stores don't delay. You will still have access to the eBay marketplace through sponsored adds and core listings and Express (don't laugh) with EIF

Saturday, May 19, 2007

Blast from the Past!

One thing I love about the Internet, is the ability to find great articles or blog posts that were written months if not years ago and bring them back into the light.

One such post I recently came across was by Trevor Ginn of Auctioning4u, a UK based eBay consultant. Trevor makes some great points regarding the "Long Tail" phenomenon, so I thought I would share a link to his post.

When I was selling online, my business, Glacier Bay DVD, benefited greatly from the "Long Tail" phenomenon, as does many an eBay business today. Interestingly, it is this "Long Tail" that eBay is trying to stamp out of stores because it does not sell fast enough to profitable for them or more appropriately "profitable enough" for them.

Wednesday, May 16, 2007

Why Don't eBay's Half.com and StubHub.com Accept PayPal?

I just went to Half.com to check on some items and found that the site does not accept PayPal. This seems very odd to me. Is the cost of adding PayPal to Half.com greater then the transaction revenue that Half sales would generate? Or, does eBay's data show that most shoppers outside of eBay.com prefer credit cards?

Interestingly, StubHub.com does not accept PayPal either. Is PayPal strictly an eBay marketplace phenomenon? Therefore, as eBay's Marketplace business goes (slowing down) there goes PayPal. I would sure like to see non-eBay PayPal transactions broken out in eBay's financial reports. The data might be eye-opening.

Perhaps Half and StubHub should offer Google Checkout :-).

Did eBay Management Make The Wrong Bet?

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!

Monday, May 14, 2007

More eBay Brain Drain!

It appears that eBay has lost another great and valuable employee, he's also a wonderful person. As of Friday 5-11-07 Adam Nash, Director of Product Management - eBay Express has officially left the company. He will be starting a new adventure in a few weeks and is taking some downtime to be with family. I will update you on his new position as soon as I find out.

This caught me by surprise as Adam is a top notch Product manager and I wish him the best in his new endeavor. Good Luck Adam.

Here's Adam's blog if you want to keep in touch.

A Little eBay Stores Board Wisdom

I often read through the eBay Stores Discussion Board and often find some seeds of wisdom that I like to share with my readers. Today I found another great example of Stores Board Wisdom. Sellers should take heed to these words.

From Carl - User ID oldspartantrader: Post #32

There is NO way to plan around this mess

Right --- I think we are fortunate that eBAY is just a small "nut" in our overall basket -- as such any wave it makes -- and it makes far more than the rest combined -- is just a small ripple overall ---

I could not function as we do if eBAY was a significant factor in my business --- There is just no possible way that a company can ever reach its full potential using eBAY as anything other than an ancillary source of sales.

UNLESS a person wishes to limit themselves on purpose and with forethought to this place it should be no more than a minor piece of an overall business plan --- The venue is self limiting by cost -- exposure -- rules -- and indifference to the needs of a small business. -- AND

Should one choose to be predominately an eBAY seller their business will be in a continual state of flux till eBAY gets to where it wants to go -- THEN when IT gets there the seller may find themselves with a nose pressed to the window looking in.

There are just to many cheap methods of moving product -- especially in relatively small packets to allow a company such as eBAY be you planning manager.

With all that said -- eBAY can be a decent fit into an overall business structure --- It just gets old to have to continually make adjustments no matter how small --

We have made more small adjustments in a year to here than in the rest of our business combined --

eBAY requires more time per gross dollar than any other part of our business -- Course some part has to hold that title

eBAY requires more time per net dollar than any other part of our business -- Course some part has to hold that title

eBAY causes more frustration amoung staff than any other part of our business -- COurse some part has to wear that crown

eBAY appears to have less growth potential than any other part of our business -- and again some part must have that distinction also.

The worrisome thing is that one part hold all those titles -- The same part comprises far less than 5% of sales -- less than 3% of profits -- more than 25% of adjustment to market efforts and time -- More than 50% of the Excedrin budget -- WITH NO REAL END IN SIGHT

Our planning for the 07 Spike season began today and will be molded over the next 4 - 6 weeks -- We will be on eBAY more than likely for that period ---- BUT

eBAY is not part of the plan -- They will be the place to move leftovers and whatever else we have time to put together --- AFTER taking care of the areas that make us real money

carl

Friday, May 11, 2007

eBay Organizational Chart

If you are curious as to who reports to whom at eBay this handy little wiki will help you out. I will also be adding it to my list of links on the sidebar.

eBay Organizational Chart

Are You Considering Opening An Ebay Store? Wait! Read This First

I never thought I would say this about eBay Stores/Shops because I love the concept and they are the only place left on eBay to feel like an independent seller but what I am seeing coming down the pike isn’t pretty. If you currently have a store and can make a reasonable profit, I would of course recommend that you stay but if you are considering opening a new store, my suggestion is to wait. Wait until eBay figures out what they want to be when they grow-up.

I am seeing a disturbing trend for eBay sellers. It is the homogenization (such a big word) of eBay. It appears eBay management wants to look and feel like a big online retailer. I believe management is concerned that buyers are beginning to migrate to sites like Amazon in increasing numbers -- this is certainly the case in the Media category – so they are pulling out all of the stops to keep that from happening.

Part of this homogenization is the new Finding Experience. In order to present the best buying experience eBay needs to control the product that is presented to the buyer -- it’s called merchandising. The popular product is at the front of the store and of course the less popular product is at the back. That appears to be the vision of the new eBay.

They can do this on Express because they don’t charge anything to be included on the site but this new approach brings up a dilemma for CORE and Stores/Shops. How do you present the best product to your buyers when you are charging sellers to be included in that search? One seller’s 35 cents is as good as another’s isn’t it. If I want to sell low price commodity products and I’m willing to pay a fee shouldn’t my product get the same exposure as a popular product if we are paying the same fee?

We must remember, eBay doesn’t sell any product. They display seller’s product to buyers and facilitate the transaction and get paid very well for that service. Amazon and Overstock do not have these limitations. They all sell their own product and only charge sellers a FVF so they are free to merchandise to their hearts content.

eBay is introducing Finding to the .com that will change the way buyers see product and the jury is still out as to what will happen to Stores/Shops. Now is not the time to be opening up an eBay Store/Shop. Sure, you can list in core because your listings only stay up for 7 days and you can be in and out of the site with no commitment but Stores/Shops require a commitment. Since eBay itself cannot figure out what to do with Stores how are new sellers going to be able to cope with all of the changes? As a seller you look at Stores/Shops as your little place on the web. You want to personalize it, brand it encourage repeat business but you are left to your own efforts to bring in buyers and with all of that effort and hard work you have the privilege of paying eBay a ton of money. Please realize your store listing fees are more like hosting then they are marketing because your exposure is limited. In order to get buyers into your store you need to spend more money in core. Then if you do actually make a sale from your store eBay takes a hefty 10% of the sale. This amount is 5% less than Amazon charges in some categories and the same as Amazon charges in others – at least in Amazon your items show up in search.

Until eBay figures out what they are going to do with Stores my best advise would be – Stay Away! Once we see what they are ultimately going to be then you can make the assessment to open a store, or not, at that time. Do not waist your money right now.

Thursday, May 10, 2007

Auctionbytes Launches a New Resource- Podcasting

Ina, is always thinking of ways to get more information to her readers and this is an excellent example. I believe she launches it tomorrow but you can check out tonight here.

: Ecommerce Industry SoundBytes

eBay's Power of Three To Control Sellers

We've all heard the eBay messaging about "The Power of Three". This is a reference to eBay (Marketplace Biz), PayPal and Skype as the three most powerful brands at eBay. One of the three is now struggling (eBay Marketplaces), one is humming along at a nice pace (PayPal) and the jury is still out on the third (Skype).

I want to discuss a different "Power of Three", one that eBay managers use to control sellers within the marketplace. This "Power of Three" consists of Price (fees) Policy (Trust & Safety) and Product (Visibility, restrictions etc.)

The Power of Price (Seller Fees)
Up until recently the preference of eBay managers was to use Price (fees) to control the marketplace because, of course, this is the easiest of the three to implement and it improves the bottom line. While many sellers believe that eBay raises fees solely to make more money; that is far from the case. eBay raises fees to control a marketplace that they think is unbalanced or headed in the wrong direction. The main motivation for the store fee increase of 2006 was not to make more money but to put pressure on store owners to reduce the number of items they listed; the side benefit was a boost to the bottom line because many sellers didn’t do what eBay wanted.

Again, in Feb of 2007 eBay targeted one segment of Core listings ($1.00 to $9.99) with a 5-cent increase in listing fees. This again was an effort to reduce the number of fixed price and auction listings in this range therefore encouraging sellers to either list items at 99 cents and let the market determine the value of the item or reduce the number of items sellers listed in that range. Lowering the starting bid to .99 cents improves conversion rates, that is a no brainer. They went after this price range because it was where the majority of product was being listed. The benefit, of this move, was higher conversion rates and marginally higher ASP’s and again if sellers didn’t change there listing strategies then there was an improvement to the bottom line.

Unfortunately, because eBay has used fees to mold seller behavior for so long the impact of these moves is lessening. So what’s a senior executive to do? How about using Policy to mold behavior.

The Power of Policy (Trust and Safety)
This approach is much more direct than using fees to mold seller behavior and therefore less appealing. It also requires a beefing up on the cost side of the ledger, which no business wants to do. Policy is like hitting sellers with a hammer while fee increases are more of a shove. Policy changes are meant to keep sellers in line, stop gaming of the system and get rid of undesirables. This is a lot of work and costs a lot of money so it is often a move of last resort. I could go more in-depth on specific moves eBay has made in this area but I’m sure you get the point.

The Power of Product (Visibility, Restrictions etc)
Until recently this third element of the Power of Three was used infrequently but since some of these other options haven’t worked it has become the last option management has in their arsenal.

If store sellers will not reduce the number of slow selling items that they list then management will reduce visibility of their listings effectively forcing them to remove these listings. One little aside on this subject, eBay doesn’t want those low velocity items on the site, unfortunately many sellers live in “The Long Tail” and don’t want to miss out on any sales even it they move only once or twice a year.

The new Search eBay is testing (they call it finding) is ostensibly to improve the buyer experience but a side benefit for eBay is that they can manage visibility by improving ranking of higher velocity items and reducing ranking of slow movers and store items. All items will show up but preferential position will be given to the high velocity items.

I think that eBay will continue to use policy to change behavior but it appears that product (visibility) will be the preferred method they use going forward. I think fee increases may be put on the sidelines for a while. Just my 5 cents!

Tuesday, May 08, 2007

eBay Helpmate ChannelAdvisor Raises $30 Million, Mulls IPO

Great interview with Scot Wingo of CA. I've known Scot for many years and he is a straight shooter that is very well connected. I Look for great things from ChannelAdvisor in the months and years to come.



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Friday, May 04, 2007

A Bit of Levity from the eBay Stores Board

I just got a kick out of this post by Oakstrom on the Stores Board. In regards to the Question What's a seller to do about all the changes at eBay.

A Seller is supposed to do the following:

1/ List in core not in store
2/ Set all listings to auto relist when they fail to sell.
3/ Pay Ebay for the privilege to not sell any items.
4/ If you actually manage to corner a buyer , and they buy then you have a whole new set of instructions.

1/ Don't charge shipping
2/ Ship it X number of days before they pay so it gets there on the day they pay.
3/ Eat Sleep wash and Bodily function of choice at the keyboard so you can immediately answer any MEGA IMPORTANT QUESTION OR QUERY, like "is the red balloon red? " Or "I paid for this 1 hr ago why has it not arrived? "

All the time smiling and thanking Ebay for the privilege.
And lighting Candles to the shrine of Meg Whitman in the Corner!

Breaking News! Yahoo! US Auction Sites are Retiring.

Yahoo has just announced that effective June 16th 2007 they will be shutting down their US and Canadian Auction sites (curious that it happens right at the end of eBay Live - I'm Just Sayin')

If you are a current Yahoo Auctions seller and are now looking for an auction site that offers free listings and reasonable FVF's hop on over to eBid.net and check it out.

Here is more coverage on the Yahoo announcement.

Yahoo Shutters Auction Sites in North America - Auctionbytes Blog.

If Microsoft and Yahoo Merge, Where Does That Leave eBay?

The Rumor du Jour is that Microsoft is in talks with Yahoo for a merger of some sorts. According to the Wall Street Journal " executives of the two companies are looking at a merger or some other kind of matchup and said the talks appear to be early-stage discussions. It said the companies explored the idea of combining last year but the talks led nowhere."

While this is pure speculation it appears likely that something major is brewing with Yahoo being the key player. I can see why
Microsoft would want to do a deal like this because they keep losing ground to Google but as we have seen over the years, Microsoft rarely pulls the trigger on these types of deals. They talk and talk and then find they can't make a deal work.

Where does this potential marriage put eBay? If Microsoft and Yahoo merge, eBay will have a hard time going it alone. In my view, eBay needs to own search in order to lessen their dependence on Google and become truly the first stop in product search. I believe it would be in eBay's best interest to open up talks with Yahoo as a strategic move. If Yahoo is in play eBay needs to ante up. I would attend an eBay/Yahoo marriage because that would be a positive move for sellers.

Update: I have it on good authority that eBay is not interested in a merger with Yahoo. Meg Whitman was pretty clear in her comments at a recent conference. Of course these things can change quickly if both companies continue to struggle.

Tuesday, May 01, 2007

ChannelAdvisor Lands $30 Million Funding

I usually don't post press releases or pure links to oth4er articles but since I've been very close to ChannelAdvisor for many years I thought I would post this link.

ChannelAdvisor lands $30 million funding

Corgratulations to Scot, Michael, Aris and the whole CA team.