Monday, October 06, 2008

Big eBay News! Layoffs and Acquisitions.

eBay news this morning ahead of the investor conference call:
  • eBay has acquired BillMeLater, the payment company that recently received a sizable investment from Amazon. “We are making aggressive moves to strengthen our leadership positions in e-commerce and payments to competitively position our company for long-term growth,” said John Donahoe, eBay Inc.’s president and chief executive officer. “Bill Me Later is a natural addition to our portfolio, a company that belongs with PayPal. Together, PayPal and Bill Me Later will make online payments safer, easier and more convenient than ever.” This move certainly wasn't on anyones radar.
  • eBay Reduces workforce by 10% - "affecting about 1,000 employees in addition to several hundred temporary workers and the reduction of open positions.
    The reduction is expected to result in pretax restructuring charges of approximately $70 million to $80 million, with the charges predominantly recorded in the fourth quarter of 2008. According to the press release, “the global reduction is intended to simplify and streamline eBay’s organization, improve the company’s cost structure and strengthen the overall competitiveness of the company’s existing businesses.
    according to eBayInk.
  • eBay also has acquired: Denmark’s leading online classifieds site dba.dk and vehicles site bilbasen.dk. According to the press release. "“Our classifieds acquisition gives us another market leadership position in Europe for this rapidly growing part of our portfolio,” Donahoe said. “We are the global leader in classifieds with top positions in Canada, Australia, Germany, Japan and the United Kingdom, and sites in more than 1,000 cities across 20 countries. The acquisition of dba.dk and bilbasen.dk gives us technology and expertise we can leverage across our classifieds portfolio to create better customer experiences.” 
  • The company also stated it expects to hit the low end of its Q3 2008 revenue guidance and exceed GAAP and non-GAAP earnings per share guidance as issued in conjunction with its second quarter earnings release on July 16. eBay is scheduled to announce third quarter results on October 15 according to eBayInk.
Well, we certainly knew that the layoffs would be happening and that some acquisitions would be made, but I was very surprised by the purchase of BillMeLater, that is a huge move to further entrench PayPal. I wonder where this leaves Amazon's relationship with BillMeLater. I'll provide more information as I hear it.

Here is the entire press release. Also the investor call is scheduled at 5:30 AM PST and the slides for the presentation can be found at the eBay Investor Relations site.

Listen to the webcast here



Just my 15%

13 comments:

ms.pat said...

I have no idea what this latest news will do for Ebay - whether its good or bad. I only know that they will, indeed, tank if they don't get their act together and get buyers on the site! Same goes for all the little sites out there. Don't expect sellers to come and list and pay fees with no payback. Now, more than ever, I'm watching every penny I spend on listing - no payback - no money from me anymore, that's for sure!

Moonlight said...

Randy ~ Does this give eBay inroads to Amazon, or do you think Amazon will drop BillMeLater from its pages?

Randy Smythe said...

Moonlight, I'm actually trying to get an answer to that question. I don't think they will remove anything right now.

Eddy said...

I love BML. I've been using them on Amazon lately to postpone some cash outflows until my December bonus comes in.

Anyway, it would be a real pity if Amazon dumped it. I suppose I would consider switching back to eBay for xmas shopping if they offered it and Amazon didn't. But I hope that's not the case.

Randy Smythe said...

Eddie, I don't think they will take BML off of Amazon. They are all about the customer there and if the customer has adopted BML then they will keep it, IMO.

Anonymous said...

I have been using BML for a while. It is a great thing to use when you are short a little cash. Ebay picked up a great company to go along with Paypal.

Anonymous said...

Randy-
Saw your quote in the Forbes article. That's the best article about Ebay I've read in a long time. Seems they got some real meaty input from insiders.

Randy Smythe said...

Anonymous

Yeah, they actually talked to employees rather than just sellers. It was a good change of pace and helps readers get a real feel for what is happening on eBay.

Randy

nadine said...

I was glad to see you quoted in this article, Randy. I wanted to share this comment from the Forbes site, and I can second the author's opinion on eBay's rep in the antiques trade:

This is an article that has been so needed. So, many just swallow the Ebay PR line and re-report the stories of happy unicorns in Ebay's magic forest.

Ebays' Detailed problems above, are very important to be sure - but, their real problems are even simpler that the above.

In the past Ebay had millions of great sellers and buyers trumpeting the great thing that they found. Since the decision a few years ago, about the buyer experience being the only important metric - and that sellers were not to be trusted and easily replaced.

Angry and hurt sellers have fled the site - and like anybody that has been scorned - Hell hath no fury. You now have hundreds of thousands (millions?)of former users that DESPISE Ebay now. The "word of mouth" about Ebay in the antiques and collectables communities, is now one of open scorn and distain.

Millions of excited and loyal users - converted to angry and sullen enemies - all in about 3 years.

Crimsonclover

nadine said...

One more comment I think is worth sharing, from a large seller of jewelry. It never ceases to amaze me that eBay continues to lose - or worse, drive out the door - big customers like Trader Lou below or Bruce Hershendon of emovieposter.com and make not the slightest attempt to keep them, as if any seller was instantly replaceable no matter the amount of revenue he brings in. Has there ever been a match for eBay's corporate arrogance?

I commend Victoria Barre on writing this article, "The Real Reason eBay Is Stuck" but she obviously does not sell on eBay.com. My eBay id: gilbertandfrech and my feedback shows over 1 million transactions.

In 2007 I paid $464,000 in eBay.com fees. Now I have moved most of my sales to http://www.TraderLou.com for a fraction of the cost.

In my opinion, the real reason why Ebay is stuck is because the sellers are no longer earning a profit. Not only do sellers pay the bills at eBay but sellers produce the products.

$464,000 paid to eBay last year and all I get is some 20 year old kid who calls me about every 6 months to tell me what I am doing wrong. If I sold that much stuff as a Melaleuca rep or similar company, I'd be part of their leadership team with multiple incentives and rewards.

Ebay will only survive if it re-engineers its business model to a seller driven model...but there are very few sellers left. eBay is probably too late. It's sunk.

Randy Smythe said...

Nadine, do you think you could ever get them back? Or is it like in a Divorce, there will never be any trust again?

nadine said...

I think that yes, you could get them back with new management.

That's the difference from a divorce, you can't substitute in a new wife or husband for the reconciliation. The new management would have to declare a company direction that was more solicitous and less insulting to its paying customers (a little apologizing & marketing wouldn't come amiss), and then back its intentions with deeds.

People still want eBay to exist. They aren't happy to see it self-destruct. eBay can never be again what it was five years ago but that would be true in any case. It can return to being something unique and functional again. How many bright knowledgeable ecommerce people have you heard use the phrase, "if eBay finds itself again"? I know I've heard it a lot. You don't use a phrase like that about an obsolete firm that nobody cares about.

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