eBay Watch: PayPal Merchant Services, Marketplace Changes, Oprah on Skype

PayPal Merchant Services in 2008

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I was browsing traffic statistics to PayPal and was surprised not only at the fivefold increase in 2007 traffic, but at the resilience and continued strength of 2008 YTD traffic. In fact, for the moment, Q1 08 traffic is actually higher than the holiday Q4 traffic. Given the modest growth of the eBay (EBAY) Marketplace platform over the past 12 months, the obvious driver of this explosion in growth is PayPal Merchant Services.

PayPal Merchant Services is benefiting from three trends, which are set to continue for the rest of 2008. First, it is quickly signing on new merchant accounts. The good news here is that 81% of the top 100 online retailers still don't offer PayPal. Second, as PayPal becomes more ubiquitous, the percentage of merchant sales going through PayPal is increasing. Again, the good news is that only 10-15% of the typical merchant's sales currently go through PayPal. Third, e-commerce traffic as a whole is still increasing at 17% a year. Even in a very conservative worst-case scenario, e-commerce will still grow at double-digits for years to come.

Put these three trends together and you see why PayPal is likely to charge ahead despite any downturn to the economy.

eBay Marketplaces Rolls Out Changes

Two big changes take effect this week. First, 'Best Match' becomes the default sort method site-wide. Read news of the roll-out here. Second, user ID's for all auction-style listings regardless of price will be masked to enhance fraud protection. Read news of this roll-out here.

Skype Partners with Oprah

Skype is sponsoring Oprah and bestselling author Eckhart Tolle as they teach A New Earth in an interactive online class every Monday for 10 weeks. During each class, Oprah and Eckhart take questions from readers around the world through a live Skype video call. Oprah.com reports that this week's initial session was watched live by over 500,000 online viewers. Over the course of the 10-week campaign, this event is likely to generate Skype brand awareness for millions of American users.