Analysis of eBay's Sluggish Listings (EBAY)

Citigroup analyst Mark Mahaney looked into eBay Inc's (EBAY) weekly listings count:

Our proprietary unadjusted listings count totaled 35MM (excluding eBay Stores and selected international locations) for the week ended May 9th, up 4%W/W. Through six weeks of the June quarter, our unadjusted listings count is tracking listings growth of 19%Y/Y. That’s down from the unadjusted QTD growth rate of 20% last week and 27% for the March quarter. It’s still relatively early in the quarter but the tougher weekly comps in May likely means that our quarter-to-date (QTD) Y/Y growth rate will continue to trend down. Our extrapolated count (which includes adjustments) still is tracking to 27%Y/Y growth, modestly below our published estimate. And although the comp pattern will make for a challenging May, we believe that June’s easier comps will likely make up for it.

In addition, we’d also note that the recent launch of eBay Express could potentially catalyze additional Stores and/or Fixed Price listings. This week we tracked 11.2MM listings on Express. Note that those listings are not incremental – Express launched in just the U.S., and listings are pulled from both Stores and Buy-It-Now [BIN] listings. Note, too, that there are many more Store listings than BIN listings, which may mean that Express sales get monetized at Store rates. Hence the discussion on the Q1:06 earnings call and at Analyst Day of the impact of Express on listings monetization (i.e., revenue per listing).

U.S. Listings
Weekly U.S. listings totaled 14MM on an unadjusted basis, roughly flatW/W. Note that eBay held a $0.10 listing day today in the U.S. (including Motors) and Canada. (We do our count early so we’d expect to see the impact next week.) Quarter-to-date, unadjusted U.S. listings total 83MM, up 2%Y/Y, which is materially lower than the 13%Y/Y growth in the March quarter. It is still relatively early in the quarter, but this steep drop-off is troubling.

As one key explanatory factor, however, we’d note the switch in the timing of Easter (which like other holidays has a modest near-term negative impact on listing/shopping activity), which fell in the March quarter in 2005 vs. the June quarter this year.

German Listings
German listings totaled 9.4MM this week on an unadjusted basis, up 23% vs. last week due to a promotion on May 4th. Quarter-to-date, unadjusted German listings total 47MM, up 39% Y/Y, which is an acceleration vs. March (up 28% Y/Y), December (up 22%Y/Y), September (up 19% Y/Y), June (up 9% Y/Y) and the March ‘05 (up 4%Y/Y) quarters.

Germany has rebounded over the past year, which is key given that Germany is eBay’s second biggest market. A challenge for eBay in Germany will come later in the year when the comps get tougher.

U.K. Listings
Weekly U.K. listings were approximately 5MM on an unadjusted basis, up 1%W/W. Quarter-to-date, unadjusted U.K. listings total 31MM, up 21% Y/Y. This marks a material deceleration relative to the March quarter’s 53% Y/Y growth rate.

Other Highlights
• France QTD listings are up 106% Y/Y QTD, up from 70% in March and 101% in December;
• Australia is up 23%Y/Y QTD, which is materially lower than the March (up 57% Y/Y), December (up 70%Y/Y) and September (up 66%Y/Y) quarters;
• Canada is down 8%Y/Y QTD;
• Italy is up 23%Y/Y QTD, down sharply from the 62% Y/Y growth in the March quarter and the 101% growth in the December quarter; and
• South Korea is up 261% Y/Y QTD vs. 210% in the March quarter and 97% in the December quarter, while Hong Kong is up 216%Y/Y QTD vs. 205% Y/Y in the March quarter and 161% in the December quarter.