Wednesday, April 16, 2008

Quick Hits From The eBay Earnings Call!

I want to wait until I get a chance to read the earnings call transcript before I give you most of my 12% but I do have a few quick hits:
  • PayPal is getting great traction outside of eBay and Google Checkout doesn't appear to be slowing them down any. PayPal grew revenue 17% on eBay and 61% off-eBay.

    PayPal is eBay's Rock Star, but how long can that last? What happens when a real competitor gets into this game? With PayPal growth on eBay slowing, what happens when a real competitor enters the game and starts to make in-roads against eBay in the off-eBay world? Google Checkout sure hasn't measured up.
  • Skype won't last the year as an eBay company. You heard it here first, Skype will be sold before the end of 2008.
  • Active Users grew by 1%, basically eBay is losing nearly as many active users as they are gaining and with the cost to gain new users growing, this metric will soon be a major problem for eBay.

There are quite a few other things I would like to discuss but I want to review the transcript before I write about them in-depth. Stay-tuned more to come.

Just my 6% (my other 6% will come tomorrow)

4 comments:

Tony P. said...

Randy, here's my spiel I posted in Scot's seekingalpha blog. It appears that the rose-coloring is fading a bit.


Man-O-man, is ebay lucky, or what? If they didn't have Paypal and FX, investors would be saying that ebay is OK, at best. More than likely the investors would be clamoring for someone's head. Oh well, ebay did IT again. Beat and Raise. Way to go, ebay!

As an eCommerce seller, here's my take:


10% growth in Listing Totals (equals)..

12% growth in GMV (equals)...

14% growth in Revenue



The 10% growth seems reasonable, but I do wonder how much of that is the inclusion of Shopping.com advertisers into the Ebay Express platform? Since there is no specific Metric that shows those sellers are NOT included elsewhere within any metric, I'm betting they are counted in the Listing Total.

The difference between the Listing Totals and the GMV is heralded as an increase in higher quality merchandise. Really? A whole 2% growth? The cost-of-living index is higher than that; which means that the majority of goods would have to be selling at *last year's prices or less*, so that the Higher Quality Merch would make this (spectacular?) 2% growth showing.

And finally, just how do you generate 2% more in revenue, than the amount of goods passed through the site? That answer is easy. Of these three metrics, and the questions they raise, this is the only one that has a definite answer. Increased Fees... aka... ebay's Take Rate.


One thing I did notice, ebay is 'making' more revenue by not spending as much as they have in the past. When they stopped buying Google Ads in March (oh yes, they simply stopped), they saved quite a bit. The Spin? uh, we're concentrating on Keeping Customers instead of Acquiring new ones.

And that's why you're not supposed to pay much attention to that flat 1% growth of Active Users. You hear? Do NOT look behind the curtain!

permacrisis said...

"basically eBay is losing nearly as many active users as they are gaining and with the cost to gain new users growing, this metric will soon be a major problem for eBay"

If they'd maximized what they had, i.e. the satisfied and active community members, that '2' would've been a '6'.

Randy Smythe said...

permacrisis,

JD wants to re-engage the eBay User because they sure ain't getting many new Active Users.

Why not concentrate on the 1.5 million most Active Users (eBay Sellers) BTW, those 1.5 million sellers probably represent 3 - 5 million Active User ID's

Randy Smythe said...

Tony, at some point the problems in the Marketplace business will be too great for them to cover-up with the good stuff.

Maybe they are hoping that tey can grow those faster than the Marketplace will decline and they won't have to worry about it.