eBay Watch: Shopping.com, Revenue Growth vs. GMV Growth and Cantor Fiztgerald's Sell Ratings

A number of key developments to note for eBay (EBAY) watchers:

Shopping.com
eBay's comparison shopping portfolio company Shopping.com is hitting 40% Y/Y growth rates. AuctionBytes reported this week that Shopping.com reported their best day so far in 2006 on Cyber Monday. According to Josh Silverman, General Manager of Shopping.com:

"There's more competition among online merchants than ever which is great for shoppers as many of them are rolling out more incentives and discounts this year. In fact, according to our research, 20 of the top 50 merchants ranked by Internet Retailer are offering shoppers free shipping this holiday."

Credit Suisse Technology Conference

eBay's CFO Bob Swan presented at this year's Credit Suisse Annual Technology Conference. Both the webcast and presentation are available from eBay's investor events page. The presentation was the usual 'power of three' marketing pitch. There was one slide, however, that I had not come across that compared the evolution of GMV growth with revenue growth in the Marketplaces business. GMV has always been the most important metric in the Marketplaces business and it was reassuring to see the ability for new platforms to drive revenue growth faster than GMV growth. In fact, in the last quarter, GMV actually fell but revenue still managed to grow. The question then becomes whether this differential in growth rates is sustainable over longer period of time.

Cantor Fitzgerald Not Convinced
In a note published Thursday, November 30, Cantor Fitzgerald analyst Derek Brown reiterates his "sell" rating on eBay and his target price of $25. We all remember when Brown initiated coverage of eBay back in October with a "sell" when eBay share price was under $30. My condolences to anybody that followed his advice.

This time around, Brown alludes to measures to improve buyer experience and reduce counterfeit at eBay's core marketplace. While revenue and listings would improve in the long-term if the company is successful in implementing these measures, Brown is concerned about the impact of these measures will have on the company's business momentum in 1H07.

Full disclosure: Author is long EBAY at time of writing.