Time For a Management Change at EBay?

Rob Zenilman submits: In today's Wall Street Journal, Mylene Mangalindan's article, EBay Merchants Seek Management Change discusses growing friction between EBay (EBAY) and its merchants. Even though EBay's stock is down 54% in the past 20 months, calls for management change are coming from its merchants, not from Wall Street professionals.

Sellers are complaining that EBay is focusing on its newer ventures - Skype, classified listings, and comparison shopping. Merchants on its legacy domestic auction site claim that both transaction volume and selling prices are down. EBay veteran merchant Steve Grossberg complains that it now takes twice the number of listings to sell a video than it did two years ago.

Comment:Saturation in domestic auctions was inevitable. Anecdotes aside, EBay is still growing, , but the growth potential is probably stronger overseas. Legg Mason's Bill Miller thinks that the recent decline in stock price is mostly due to future uncertainty. One thing to remember: EBay still one of the web's most popular destinations. See: Second Quarter earnings conference call transcript.

Comments

[Rick Williams:]

Would you buy stock in a company whose ex-customers actively and aggressively speak out against it? Would you hold shares of a company after 15,000 of its potential clients (recently) spent 5 minutes reading about its customer complaints? Would you buy the stock, if the list of customer complaints exceeded one million? Would you hold the stock if analyst who consistently misjudged its value recommended it and its year to date performance was 40% below the S&P 500? If an active “negative ad campaign” (exceeding 6 million impressions) came to your attention, prior to your investment, would you still buy? If you answer yes to any or all of the above you should buy shares of EBAY or shares in any mutual fund holding positions in this company.

Try a Google search on any of these expressions: "Beware of EBay and PayPal", "Beware of EBay", "Beware of PayPal" and then compare the results with "Beware of IBM".

The url below leads to "my3cents.com", just one of many sites where customer's air their complaints about EBAY and PayPal.

www.google.com/custom?...;hl=en&lr=&...www.my3cents.com/my3ce...;domains=My3cents.com&...

Rick Williams

2006 Aug 21 02:34 PM

[Rick Williams:]

Would you buy stock in a company whose ex-customers actively and aggressively speak out against it? Would you hold shares of a company after 20,000 of its potential clients (recently) spent 5 minutes reading about its customer complaints? Would you buy the stock, if the list of customer complaints exceeded one million? Would you hold the stock if analyst who consistently misjudged its value recommended it and its year to date performance was 40% below the S&P 500? If an active “negative ad campaign” (exceeding 6 million impressions) came to your attention, prior to your investment, would you still buy? If you answer yes to any or all of the above you should buy shares of EBAY or shares in any mutual fund holding positions in this company.

The url below leads to my3cents.com, copy and paste it in your browser.

www.google.com/custom?...;q=ebay&sitese...

Rick Williams

2006 Aug 21 07:13 PM