eBay: Bear Stearns Optimistic - For Now

After dining with a bunch of eBay (EBAY) powersellers, Bear Stearns analyst Bob Peck is now more optimistic about the company's ability to re-accelerate listings growth and revenue per listing. Peck believes "changes eBay has implemented / is implementing will ultimately drive more buyer activity, which should improve seller economics, and hence a re-acceleration in listings." He notes, however, that this will remain a faith-based opinion until at least mid-summer.

Peck says sellers get higher ASPs and ROI at Amazon (AMZN) and (GOOG) GOOG but they sell on EBAY because of the huge volume, which gives them purchasing power in their overall inventory. I think EBAY needs to drive a better buying experience to maintain the volume. The EBAY demo using Adobe (ADBE) Apollo was a much better user interface and could result in a better experience.

Henry Blodget comments:

I own the stock and would therefore be happy if Bob were right, but the above logic sounds pretty flimsy. eBay used to have no competition. Now it has a lot of it. Following on Jason's "interface" comments, eBay's still feels clunky and amateurish--almost as though the company is trying to maintain the informality and fun of its Pez-dispenser days while actually selling Mercedeses. I'd still be in favor of an eBay-Amazon merger (Amazon's strengths match up well with eBay's weaknesses), but I gather Meg and Jeff hate each other.

EBAY 1-yr chart