Shop Talk

Retailers, consumers and prices

Check Out Line: Anyone bidding on an overhaul at eBay?

March 12, 2009

ebayCheck out the transformation eBay, the Internet’s premier auction website, hopes to pull off.

Trying to ease fears its best days are in the rearview mirror, eBay is counting on growth at its PayPal payments system and jump-starting its lagging core business.

Chief Executive John Donahue has vowed “ruthless” change to its model.

Skeptics saw nothing new in eBay’s plans, however. Analysts have said eBay needs to raise its performance in the recession and fend off online retailer Amazon.com, which has stolen market share.

On Thursday, Barclays cut its price target on eBay to $14 from $15 per share.

While eBay recognizes marketplace challenges and the need for site innovation, Barclays analyst Douglas Anmuth said in a note that “we still thought the day was light on details & this raises more questions about execution given the co.’s recent track record & the now lofty goals over the next few yrs. Having confidence in 2011 outlook is also difficult when co. seems to have limited visibility in 2009.” 

Bernstein analyst Jeffrey Lindsay said in his research note that turning around eBay’s marketplaces business will be more difficult and take longer than expected, but he raised his price target on the shares.

“We are raising our  target price slightly to $15.50 (from $14) to reflect management’s more aggressive strategies for PayPal and Skype, but we continue to rate eBay Market Perform.” 

Also in the basket:

Beermakers not eyeing new sports deals in downturn

Smithfield Foods posts third quarter loss

Retailers cut costs, prices to fight recession

Neiman Presses Designers for Cuts (Wall Street Journal)

(Reuters photo)

Comments

Good riddance–eBay turned its back on the folks who brought it to the dance, the small-time auctioneers of antiques, collectibles, etc.

Bring on the next generation of low-cost online auction sites! This one is dead.

Posted by Lou | Report as abusive
 

Half of the items I looked at on e-bay recently trigger the phishing protection I have. What good is it serving. They only want big sellers and all the one-item posters that made e-bay what it is have been cut out. It’s about getting rid of stuff – not about who can sell the most, for the most profit. I also noticed that people post for a low initial amount – and then rape you on the postage.
It’s just not like it was when it started. It’s gotten ridiculous, overpriced and obviously dangerous(if it triggers phishing that often, and it’s the only site that has triggered mine, so far). Amazon.com is NOT a bidding site, so how should it be “competition”? It’s not – e-bay just sucks now….maybe if they quit being greedy and went back to the way it was when it started…I might actually go there and buy something.

Posted by Gunner | Report as abusive
 

Good article, but good points on ebay predicting 3 years out quite happily, but no ideas on the next year or so, and analysts’ concerns with actual execution – certainly they’ve executed Ebay itself. You’d think that good management could have grown the company while transforming it. PAYPAL is the one bright spot in Ebay’s self generated panoply of disasters, but I’m pretty sure PAYPAL has done so well because Donahoe and company have been focussing on ruining Ebay – that jobs pretty well completed now, so onto other areas! Great! The black thumbs have arrived – I suspect we’ll see a ton of well-meant but misguided decisions on PAYPAL and it’ll join EBAY in its dive. No amount of colorful PowerPoint ballons will be able to keep it up.

Posted by Dave | Report as abusive
 

Ebay is just fat and lazy. Amazon is really fast and active.

 

Too little – too late ! As has been pointed out, they tried to change their business model at the expense of it’s smaller and, it could be argued, most profitable members. However, the changes they have enforced, such as the feedback system, and tried to enforce, such as mandatory PayPal in Australia has alientated it’s original loyal membership. I would not want ot be an investor banking on an upswing to it’s glory days.

Posted by Craig S | Report as abusive
 

You’ve got a management team that knows they want to innovate and disrupt something, but they have no idea what, and they certainly don’t know the value proposition of their own marketplace. This does not bode well for the future of the company, or certainly any stakeholders there, namely sellers. The management team always speaks of the “velocity” their marketplace has, but nowadays, it is rocketing straight down.

Posted by Daveym | Report as abusive
 

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •