eBay Worsening 30 comments
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Previous quarters’ doubts about eBay’s Q4 performance weren’t unfounded, as was evident in the company’s results that were announced on Wednesday. eBay’s (EBAY) CEO, John Donahoe, called himself “frustrated” with the previous year’s user experience and search improvement initiatives failing to translate to much higher revenue and GMV growth.
Q4 revenues of $2.04 billion were lower than the market’s expectations of $2.1 billion and were down 7% over the previous year. Its EPS of $0.41 also slipped by 9% from the previous year, though it managed to beat the Street’s expectations of $0.39. EPS recorded its first ever year-over-year decline.
The company closed the year with $8.5 billion revenues, recording growth of 11% and EPS of $1.71 grew by 12% over the year.
By segment, Marketplace transactions were down 16% over the year and contributed $1.3 billion in revenue. Active users grew by 5% on a trailing twelve-month basis. Classifieds grew 48% and text and graphical advertising were up 47%, but Shopping.com declined 50%.
PayPal posted revenues of $623 million and grew by 11%. Total payment volume was $16 billion, an increase of 14%. Global active PayPal accounts grew by 23% to 70 million. Skype revenue grew by 26% to $145 million in the quarter. Skype-to-Skype minutes grew by 72% to over 20 billion.
Going forward, eBay expects to generate revenues of $1.8-$2.05 billion with EPS of $0.32-$0.34.
During the year, the company made quite a few significant acquisitions. It acquired Fraud Sciences, which should improve PayPal’s risk management capabilities; Bill Me Later to extend its leadership position in payments, but mainly to thwart Amazon (AMZN); and DBA and BilBasen to broaden its global leadership in online classifieds.
After taking over from Meg Whitman, John Donahoe listed three clear priorities for the company:
- First, make eBay safer and easier to use.
- Second, improve value and selection by combining fixed-price sales with auctions in a uniquely eBay way.
- Third, extend PayPal’s leadership position both on and off eBay.
During the year, Donahoe’s game plan had varied results. Though eBay has made significant improvements in their user interface and migrated to a more balanced auction and fixed-price model, their user base is not growing substantially. Today, Amazon is a preferred e-tailing site over eBay. ComScore’s metrics also reported traffic to Amazon in December 2008 as rising by 9.8% over the year compared with eBay’s 2.5% drop in traffic.
The company also doesn’t seem to be doing much with Skype, despite Donahoe’s admission that Skype is not likely to have many synergies with their other portfolio and that eBay is treating it as a standalone business. Why not sell it to someone who may not treat it as standalone and get some real value out of it, and be willing to pay commensurate cash in exchange for the opportunity? Yes, I am talking about Microsoft (MSFT) and Google (GOOG).
The stock continued its drop and at the time of writing, had fallen to a record low of $13.28. I have seen nothing yet to say with any confidence that eBay is going any place that I want to go with them from an investment point of view.
Disclosure: None
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I'm not looking, I'm already established elsewhere. It is called reading the writing on the wall.
And also, John Donahoe is frustrated with his results? Really? In actuality, what has panned out is what the thousands upon thousands of users-- buyers and sellers -- have been declaring from day one.
It reveals what an utter fool Donahoe is.
And yeah, Wall Street gets it now! And has for quite a while.
Guess who said this on Dec. 3, 2008?
"The recession economy suggests that auctions will grow at an increasing if not exponential rate. The auction platform offers strapped individuals a one-of-a-kind opportunity to convert stagnant assets (closets, basements, attics and personal crafts) to cash."
"EBAY will see auctions become an increasingly significant factor in its growth ...coming soon to rescue EBAY's flailing attempts to compete with AMZN on fixed priced goods. Recession-proof growth? Perhaps not. Recession-resistant growth? Most certainly."
These were your words from a previous post my friend.
Start CHOMPING on these, and stay away from the loco weed. :)
The dynamics of those comments are expected to take place over the coming year, my friend.
Time flies, when you owe money. And the only time you need patience is when you are fresh out.
Luck is a lady and she is is one fickle beeouch. ...Good luck.
CHOMPS
^__^
..
LMAO!
Looks like Bob C gotcha' on that one, Coyotebait!
It gives a certain satisfaction when eBay's own clueless Spin Doctors have to put their tails between their legs and eat their own words.
It's almost as much fun as watching eBay implode!
Take a closer look at that graph, too, Coyotebait. eBay began it's spiral of death in late 2004 early 2005. Let me try to explain how that graph works in layman's terms:
If you put a drop of water on the tip of January 2005, it would trickle all the way down to the bottom of 2009. 5 years of decline - can't blame that on the recession, now can you?
Some would call that the slope of pure greed and ignorance. I call it the death rattles. I'd say it's time to pick out a plot. Perhaps one over-looking Bonanzle.com, where eBay's old sellers are now happily buying and selling.
Good call Bob C!
Free from the Fees: www.Bonanzle.com
Bob C, still hanging around eBay? Just too compelling? I know. LOL
Where the heck have you been!
I really did miss your spin!
But , then again....
I thought you had bought the farm,
on eBay of course, and moved to the country, with no internet service. Milking chickens, plucking cows, etc.
As far as how am I doing? Glad you asked!
Booth set up at Bonanzle, window opened to it, chatting live with buyers, selling, & making much more profit than you know where.
I hope you still have sellers to buy from on eBay, most are moving over to Bonanzle.com
Latest count at Bonanzle you ask?
Over 945,000 items
Over 22,000 members
PSU ranking 4
Gotta run, buyer wants to make a purchase.
Later dude, or dudette
Ya screwed the pooch. You WILL be a Harvard Law School study in brand damagement in the near future.
Let's be honest, you can pump Bonzagle all you want, but it's a joke. Never purchased there and see no compelling reason to, but good luck to you.
Thanks for the kind words. but please don't misread the reason I sell on Bonanzle, and formerly on eBay.
I'm far from destitute myself.
I retired in 2005 at age 58, and needed a hobby.
Having been a collector of many things for many years, it is time to downsize my stuff.
Selling should be fun, and it is again, at least for me.
Another hobby of mine is bashing greedy companies.
One in particular. : )
Take care,
Bob C
For years as a silver eBay power seller I worked hard to maintain an impeccable feedback rating and earn myself a low 6 figure income on eBay. Then along came John Donahoe. He insulted me. He stole from me. He did not hide his disdain for me. He unceremoniously drove me forever from eBay. In doing so he opened up a wonderful new world for me. I am now free from the inane restraints on my business and have a much lower operating margin. Profits are skyrocketing and business has never been better.
I would like to use my new found wealth to throw a big bash for John "The Liberator" Donahoe. I hope the legions of other former power sellers will join us in celebrating our new found freedom.
The past is history, the now is recession-driven exchange of goods, and hatred can't change it.
I have no love for Donahue or anything about EBAY other than the opportunity for Ebay to be dragged, kicking and screaming if necessary, back to the reality of an auction-based exchange of personal, non-conventional property. It's going to happen, and while Ebay may not get 100% of it, they will get the largest share, by far.
If you are a trader, don't bother to reply. Traders are the problem, and will never contribute to a sound investing climate, which is exactly what we are lacking, and why we are in this trumped up mess we are in.
Good luck, investors.
CHOMPS,
^__^
..
Ebay needs to:
1) get a decent search that levels the playing field. Don't take fees for service and then bury a seller's listings deliberately.
2) get rid of the DSR's they're the dumbest thing on record. I believe the majority of us graduated kindergarten which was the last place we earned gold stars! Let's be adult. You only need one rating: "would you buy from this seller again?" Yes? No? Too simple? Not enough leeway to manipulate the listings these sellers paid for???
3) stop the 21, 120 and 180 day holds on seller's payments thru Paypal before the government stops it for you! Its just plain dirty pool.
4) streamline your site. Get some people who never bought on Ebay before and let them bumble around like the present buyers have to do. You'll learn a lot about your site that you won't like to hear!
5) ... and this is a BIG one....TREAT SELLERS LIKE HUMAN BEINGS. Under NO circumstance should sellers be losing their items AND their money to unscrupulous buyers and even their reputations and their ability to sell on the site while you look the other way!
These are some of the major things driving sellers to build other sites the way they built ebay. Mr. Donahoe - your company will never again be a monopoly - they will never again have a hold over sellers because they have no choice. They are out there right now on Etsy, Bonanzle, iOffer, eCrater, craigslist, etc. BUILDING these sites and they are beginning to sell again...AND many of them are beginning to forget there ever was an Ebay!
I have no idea why the board of directors of this company keeps letting this go on, its seems criminal too me.
Funny they get rid of 1500 customer service people to streamline the site??? these people buying shares of this company seem to be falling for this, this stock is worthless.
I remember the look on the guys face interviewing Donahoe on CNBC it was priceless, he sort of gave him a look like: ummm are you really saying this and trying to make me believe this is a good move, I am not that dumb ... this Donahoe keeps saying this stuff and people used to actually believe it for some reason, I can look at that guy and see he is just a fool/liar and totally out of his league, he should have never been a CEO of a company like this or any other if you ask me.
As far as PayPal, well PayPal was built by Ebay users long before Ebay owned it, Ebay had its own Credit processor it was called "Billpoint" and it was a miserable failure, Why you ask? cause of Meg running it and the disruptive policies of Ebay.
Once Ebay goes those people will go to another processor and PayPal will be old hat and again worthless, the only reason PayPal worked is because of Ebay, when you got 100's of millions of people using Ebay and sign up for that processor its just convienent to use it because you already have it ... once Ebay gives up its market share to another big auction site or sites they will then use that processor, people dont give a damn about PayPal, its just easy because they already use it, but if sellers change whom they take payments from, its done.
If another site opens and all the sellers use another processor because its cheaper to use its over for PayPal, PayPal owns nothing and sells nothing its just a processor, I am sure any company in the world would process for half as much as PayPal does when you have the super high level of transactions, you can discount fee's heavily.
PayPal used to be basically free or charge very little before Ebay owned it and that site made tons of cash and didnt screw everyone in the process, Ebay has made the U.S. a monopoly as far as processing goes making us only take instant payments and no money orders, I mean they dont force you to use PayPal but thats what everyone is used to on Ebay so giving us a choice of that or some unknown processor or NOTHING makes it total BS.
Please read This NOW : Ebay = TOXIC STOCK
Please NOW visit : nymartsDOTcom to get an EYEFULL of what is in store for Ebay in 2009.
Click on the REQUIRED READING links.
NOW !
P.S. They have just sent me an 8% off any purchase coupon. That's pretty desperate considering that they don't even make 8% of the sales price on most listings.
Thats one of their problems, Ebay used to be cheap to list and sell on, now once you sell it you are almost afraid to see what profit you end up with, 15% of gross or more is usually 100% of alot of people's profit, thus people ran to Craigs list or something like that.
They kept raising their rates to stay with Amazon, you are making tons of cash every quarter so lets raise our rates to what others charge and make some more money lol
Did it work?? hell no! ... why? because people sold alot of used item and such on Ebay and didnt use Amazon, now that they are both pretty much the same price people gave up or went looking for a better or cheaper place.
Why raise rates sky high when you got all the people using you? ... So people will get mad and discover other web sites? another complete blunder by Meg and John Donahoe, people have left and are finding other places all because they just couldnt afford to list and couldnt figure out how to list, they made it from simple to now complicated as hell for a newer user.
Think, why would they keep raising fee's when the were clearly making tons of money, why raise it to what others charge to make people look other places?
High fee's might have worked in the 90's because no other existed like Ebay, now just about any person can make their own site for practically nothing or go to one of 100 other sites, good move Ebay you made the wrong move for years, its just finally amplified by the economic times and your turn to wanting to sell items that are on a 1000 other sites instead of being unique.
Lets talk about the economic times, Ebay should be blasting every other site out of the water right now if they would have stuck to what worked, low fee's and a level playing field for all sellers, the Diamond sellers are now sticking it to Ebay and they have to take it because Donahoe ran everyone else off by giving Diamond sellers a elevated level in search and free listings of NON UNIQUE items that everyone else on the web sells including the Diamond sellers, these people all have their own websites which when you buy from them on Ebay they send you coupons to use at their own website and basically tell you not to buy from them on Ebay .. go to their own website lol
Donahoe I wish you would read these because they are 100% true, you and Meg ruined Ebay and people that sold there, soon I hope the media will turn on you and report whats really going on on Ebay and send you packing without a cent to your name.
CEO's should be held 100% liable for what they do to a company, especially this guy, he has openly insulted smaller sellers by calling them "noise", this guy needs slapped by everyone from the stockholders to the sellers and even the buyers, because if it werent for Donahoe and Meg the buyers would be paying alot less for items on Ebay right now, fee's fee's and more fee's is all they know.
Well they can't do it on Ebay because someone "dinged" their stars by giving an horrific 4 outta 5 thinking that was good and Ebay told the seller "sod off outta here, you're bad!"
I don't know if I'm allowed to post links here but I'll give it a bash. Last recession in 2001/2002 compared to this one. Ebay is worse now than the Nasdaq was the whole of those two years when Ebay was raking it in.
gigaom.com/2008/12/10/.../