Thursday, July 17, 2008

eBay Earnings the Day After!

eBay's shares are down 11% in pre-market trading this morning to $24.98 on tepid guidance for Q3. It looks like Wall Street is finally seeing the real problems here and moving to other investments.

I read the transcript of the earnings call and honestly, I was bored. It isn't like we haven't been telling them this was going to happen.

Amazon announces earnings next week and if they have a good Q2 and raise guidance for the rest of the year, what does that say about eBay? It's not the economy, or more accurately in a slowing economy, buyers prefer Amazon.

If eBay management does not change course and fast, they may actually see decline in the Marketplace business by the end of the year.

They can turn it around, but they would have to completely change their strategy and it isn't likely that they will do that. This management team is too committed to this current strategy.

Just my 12%


Anonymous said...

I don't know if I would sum it all as "in a slowing economy, buyers prefer Amazon".

How do you know that buyers wouldn't prefer Amazon in a good economy too? Maybe they just prefer Amazon? lol

ms.pat said...

There is little doubt that Ebay has milked and hobbled sellers to the point they are either leaving or raising their prices to try to keep going. End result, lack of sales. This should be the type of economy where ebay auctions should excel! Sellers should be able to offer real bargains that will attract buyers who haven't as much money these days as in the past. But no...ebay continues its gouging and hobbling of sellers! Kind of like that old joke "the flogging will continue until morale improves!" Most sellers are finding out they can go to other venues and maybe not sell near as much BUT have far less fees and are able to lower their prices and keep more profit. Its not rocket science but Donahoe still fails to get it. I'm just happy wall street finally seems to be catching on and I'm hoping the little bit some of us did by going around to financial blogs and telling the truth helped people decide whether they wanted ebay in their portfolios or not. Probably not true but my hope all the same ;-)

Randy Smythe said...


You got me there. :)

Anonymous said...

Ebay really is stuck now. Everything they do is for good quarterly numbers for wall street. Long term be damned. Now the house of cards is collapsing due to years of greed and negligence.

I don't see how ebay can recover with this leadership and their brand in the toilet because of fraud and greed.

How much of their current GMV is based on questionable sellers? Ebay has to take out their trash but that trash pays a lot of fees.

What ebay really needs now is leadership willing to take risks.

Give the quality sellers with happy customers BIG discounts.

Force sellers to register to Amazon standards and boot the lousy sellers FOR LIFE.

Take ownership of the fraud and scams rampant on ebay.

Make buyers feel safe. Ebay should cover buyers against fraudent sellers.

Then maybe in 5 years ebay could be back. But it will never happen because ebay is too cheap.

nadine said...

Take ownership of the fraud and scams rampant on ebay.

But Ebay can't do this because THEY DON'T KNOW HOW. To police the retail business, you have to understand the retail business.

How can you possibly chuck out the scamsters when you can't tell real from fake? Sure you can start responding to customer reports, but if you can't tell real from fake their either you are often no wiser.

If Ebay didn't have this greedy trust fund mentality, they would have figured out at least five years ago, if not before, that they had to pull up their socks and learn how to seriously police their site. Instead they let it become a paradise for thieves while trying to do T&S on the cheap.