eBay Failure: A Lesson to Technologists, Investors

eBay (EBAY) made a wise decision to can an ill-fated and unwise auction marketplace for advertising, Ad Week reports:

Online auction house eBay has shuttered its Internet-based system for buying and selling TV and radio ads, the company has confirmed on its Web site. The system had been up and running for just over a year.

The system was controversial from the start and received little support from the cable network industry, which eBay had hoped would contribute significant amounts of inventory. But the networks by and large stayed away fearing the process would cheapen the value of their ads.

The Cabletelevision Advertising Bureau, a trade group representing the sales groups of most of the big cable networks, did not endorse the system and few of its members participated. Among the few networks that tested it were Oxygen and Ion.

Executives at eBay believed part of the problem was that the marketplace remained confused about how its cable ad system worked. While it was often referred to as an auction, it was actually an electronic RFP system where buyers could issue requests for packages of time specifying their precise needs. Sellers could respond and a negotiation would ensue, via the system, until a deal was concluded.

Let this serve as a lesson for the frigtards who think that ad agencies (media planners, creators and buyers) will eagerly give up their role as gatekeeper to a global $500B marketplace, off which they generate a 15% cut (so roughly $75B per annum).

In 2005 when I left my old gig as VP of Sales for an online publisher I thought of something similar… so I picked up the phone and called some of my contacts at agencies.  They all said this would not work… for the reason I outlined above.

This might have worked before agencies realized how big the online media space would be, now they know how big it is, how much bigger it will be and trust me they don’t want another Google (GOOG) to come in between them… especially when you consider Google’s outsized market cap relative to the Big Four agencies.

Love how eBay says the failure is a result of agencies not understanding this or that.  Really?  Maybe it’s because they understand it too well and don’t want your auction paws anywhere near their $500B ad pie.

Comments

[auntyebay:]

When ebay started it was a charging elephant. Meg did her best to ruin it but it was running too strong. Now that all of her stupid ideas have worn out the monster, she left. It has no where to go now but to the elephant graveyard.

2008 Jun 12 10:55 AM

[Alex Filonov:]

There is only one lesson here: if you try, sometimes you win, sometimes you lose. If you don't try, you don't win. Ad marketplace is changing rapidly now and 500B pie ad agency are currently safeguarding might evaporate much faster than newspapers' ad revenue. Google didn't make much dent on it, it just created completely new market. But somebody will.

2008 Jun 12 12:19 PM

[agree:]

Before auction snipes, before paypal,...ebay was great.

Whitman and Cobb should have been fired right after 9/11.

Nuff said.

2008 Jun 14 02:14 AM

[blondie:]

Ebay is nothing more than a HUGE monopoly! They feel they have the right to dictate every move their sellers make, while trying to gain more trust from their buyers. Ebay has done the exact opposite! First, they are not your buyers, they are MY buyers. Taking away someones right to leave feedback, yet allowing the buyer to leave any type of feedback they feel is appropriate is slowly backfiring on Ebay. And if the feedback changes or the outrageous fee's don't get you, just wait, PAYPAL WILL!!! Being a Power Seller myself and selling over $16,000 a month, I found myself paying $3,000+ a month in Ebay fee's and another $7,000 a month in PAYPAL'S NEW 21 DAY HOLDS!!! To make this short and sweet, the $7,000+ that Paypal held, they can issue refunds to those buyers. I REFUSE TO SHIP MERCHANDISE THAT I HAVEN'T BEEN PAID FOR, PERIOD!! EBAY AND PAYPAL'S NEW 21 DAY HOLDS ARE NOTHING MORE THAN A SCAM!!! Basically, they say they will hold the funds for 21 days or until you receive positive feedback, BUT IF YOU SO MUCH AS BREATH WITHIN THAT 21 DAY PERIOD, GUESS WHAT?? EBAY AND PAYPAL NOW HAVE THE RIGHT TO HOLD YOUR FUNDS FOR UP TO SIX MONTHS. ISN'T THIS FUN?? When I refused to ship items that Paypal held the funds for, Ebay then suspended me. The same day, Ebay and Paypal sent emails to every customer telling them to file a dispute and request a refund. Several of my customers emailed me this email and it disgusts me! Being a Power Seller, I sold up to 100+ items week. So, now I have almost 100 sellers that have paid for items that will never be shipped to them. What is even worse, when I log in to Paypal I now see they have released some of the funds that were on hold and didn't refund the customer. Why? Paypal and Ebay now say I owe them over $11,000.00 and my response to that is "NO, NO, NO EBAY AND PAYPAL, I WOULD NEVER KEEP YOUR MONEY, I'M JUST HOLDING IT FOR 21 DAYS. THIS IS BETTER FOR YOU AND WILL HELP YOUR CUSTOMERS TO FEEL SAFE. IF YOU BREATH DURING THIS 21 DAY PERIOD, IM SORRY TO SAY I WILL HAVE TO KEEP THE FUNDS FOR UP TO SIX MONTHS OR UNTIL THE MATTER IS RESOLVED. YOU WILL SEE IN THE FUTURE THIS WORKS BETTER FOR ALL THE EBAY SELLERS AND BUYERS. How does it feel Ebay and Paypal? You will not get a dime from me, ever! If anyone knows of a class action suit that has been filed please let me know and I will be one of the first to jump on board!! No more will Ebay or Paypal take advantage of me, my customers or MY MONEY!!

HEADS UP-
If you have a Bank of America account, watch out because Paypal uses Bank of America. If you try to contest the charges that Ebay and Paypal will try to take from your account once you have been suspended, it will be a lot harder because BOA is PRO-EBAY and Paypal. In my opinion, they are all three scum of the earth!! You can Google Bank of America, Paypal and Ebay and you will get page after page after page of complaints! Be careful!!
Blondie

2008 Jun 28 06:27 AM

[agree:]

now they talk of meg in the presidents cabinet, god help us

2008 Oct 17 04:53 PM

[AffinityGW:]

Other
The ^ End
eBay Thinking
If your computer doesn’t run fast enough, turn it off ‘til it does.
We don’t allow customer abuse that we don’t originate.
Only 95% of our members have better customer service. That is why we will train you.
Fraud will be measured by profitability.
Only former members complain. The rest haven’t reached that point.
The best way to collect on an overdue account is to stop that account from making money until they pay. This is especially important if they don’t have any money because they are not likely to send it.
We improved customer service by adding polite introductions to irrelevant canned responses.
A satisfied customer is one who gives up.
We change practices every time we are forced by law to do so.
WELCOME TO EBAY – Let the chaos begin.
Indifference reduces worry.
When you have no competition you are always state-of-the-art.
We are the best at what we do and nobody else is us.
Customer service is all we expect from our customers.
We enable you to make money for us.
It was innovation that enabled our complacency.
Inefficiency can be overcome by raising prices.
Wherever there is disease there is eBay. We have no boundaries.
If there is any way we can help you, let us know. We don’t have a clue.
Contact Customer Support and we will make matters worse for you. That is what makes eBay so special.
Everyone in our company is empowered to do what we say and we are a computer program.
The secret to our success is to keep the same stuff moving from hand to hand. It eliminates the need for manufacturing.
Because of eBay, the United States Postal Service is busy in spite of the internet. That saves American jobs and generates tons of recyclable cardboard.
USPS shipping helps collectables become rarer, thereby increasing the value of remaining ones.
Your business is our business. Your money is our money. Your success is not important.
We do not make mistakes, therefore we cannot make mistakes. Any apparent mistakes did not happen and could not happen. Therefore, calling a mistake to our attention is pointless because it could not have happened and did not happen. Is there anything else we can help you with?
Watch an item until somebody buys it, then act.
Bid at the last second, and you will win often win sometimes win might win seldom will win get beat. Who is that guy?
Search until you find something nice that you can’t afford. Then watch it until it ends. It helps the seller to be optimistic and to learn to cope with disappointment both. Thereby, you serve your fellow man. It tries your resistance, thereby strengthening your character. Or, it makes bitches out of both of you.
We have a new pricing structure that reduces your cost on some features and adjusts fees on some others. It all comes out in our wash.
What you see as inefficiency is the very reason we have raised your fees.
We will announce a new initiative early next month, so watch out.
Due to rising costs for something somewhere, fees will be adjusted to reflect needed increases so that we may better serve you.
Customer service availability is being increased to 62 minutes per hour to better serve you.
Here at eBay we are committed to the principle of valuing our customer as our enemy.
If you make an error, we will enhance it. That is why punishment works.
If you are behind in your eBay fees, we promise to do everything in our power to stop you from making money until you pay with it.
Following eBay’s official customer service route will direct members into three wrong turns and a dead end. Moreover, we strive to make your trip a pleasant one.
Our Customer Service Representatives are trained to politely tell our members to go to hell. There is no use in offending our members.
All policies at eBay are in place for a reason and logic has nothing to do with it.
Changing the light on bullshit gives a fresh perspective without essentially changing it. There is a great deal of operational stability in that approach.
In our point of view, good practices are those that follow our point of view. Our actual point of view is a closely held secret, as are all advanced weapons.
We strongly discourage anti-conundrum thinking.
Every eBay policy is there for a reason. It may not make sense to you, but there must be a good reason for it. To change anything upsets us.
To better fulfill your opportunities at eBay and understand your role, you are encouraged to read our new posting titled: Mafia Economics and You.
Stay in the box and trust your leadership team to do the right thing. It is your path to promotion and increasing fringe benefits*.
*Efforts are under way to eliminate this problem
Due to recent fee structure changes there are now more openings than ever before for new members.
Press Release Template:
The media got it all wrong… (disclaimer details)
“In short, ladies and gentlemen, our three year plan is to press on for three more years!”
Our highly trained Customer Service Department is now able to write custom introductions to our canned responses. We believe in planting flowers in bullshit.
eBay Members Blog:
eBay is dedicated to perpetuating and exacerbating members’ problems and we should not disappoint them by solving any problems ourselves.
I calculated that my losses are 8% an item due to new fees. How can I increase my sales to make up for it? Any feedback would be appreciated.
I from Thailand have understand English. What is toad sucking jackass?
What is the best way to get even with a buyer, and no stupid responses please.
Will the seller that sold that shirt please let me know if they have any more.
Anyone out there know the best category for listing illegal aliens? Thanks, Tex
Yes. If estate sales aren’t available to you right now, kill a rich person that has a lot of stuff. It will tide you over until somebody dies.
To the poor schmuck trying to get customer service from eBay – get a life already.
To the guy that wanted to know how to prevent getting things broken by the post office, try UPS.
eBay is teaching customer service at 10:00am (PDT) this Thursday. It’s probably going to be real funny so tune in.
Anybody know how I can bid on my own stuff to get more money out of it. I’m new to eBay.
What’s the best way to hide a crack in a dish? Half my sales depend on it.
To the guy that posted the question about the slot machine on July 12, 1999. Could you be more specific?
I have a brand new right shoe size 10D in black from Hickey-Freeman (Cat #32-5115). If you need one, let me know. It’s not doing me any good and I’ll send it to you for just the postage. Thanks.
Is there a different eBay anywhere? This is important. I need to know right away.
A fast growing eBay alumni association has been started at ebitter.com.
I have a wholesale quantity of yak butter at my eBay store, himaliar2offen. It won’t last long so check it out.
Does anybody know the correct spelling of szechymuts?
I am missing figurine #3 of Miscellaneous Statuettes® by the Franklin Mint from 1983. I would like to sell them as a set of eight. My wife says it doesn’t matter, but if you have one please let me know.
I have searched every way I can think of for a pair of Anuit snowshoes made in 1957. Does anyone have a clue?
Will the seller that wanted a thingamajig please contact me. I found a nice one in my garage.
I have a live German hand grenade from 1939 and eBay removed my listing on the first day as a hazardous item (their words, not mine). I need some code words for it so collectors will know what it is, without tipping off eBay, so I can relist it. Is there someone that has done this before that will help me?
eBay Trust and Safety removed my listing for Milk Can, Complete w/ Lid because it may contain carbon tetrachloride (?) They don’t respond to my emails. Can anyone explain any of this? I have been on eBay for only three months.
Response: Welcome to eBay
I give buyers three days to pay. Lately, some have gone over the deadline. What is the best thing to do?
Response: Have you asked them if they are experiencing a problem? I always do and have never lost a sale.
Response: Hit the suckers with an Unpaid Item Strike. eBay will refund your selling fees so you can relist the item. Those SOB buyers will regret that they ever bid in the first place. Don’t let them screw you around.
Response: I had that happen to me once. I found out that the buyer went out of town to a family funeral instead of paying me. I filed an Unpaid Item Complaint to make them pay. It worked. Three days later I got my money.
If you don’t receive this message, please let us know – eBay

(If this message annoys you, pass it on to three people you don’t like – The Author)

Apr 25 12:48 PM

[darkblue:]

Ebay was and always will be a great place to shop online. Of course, sometimes you might find some persons who only try to scam you, but if you have a little experience, you know how to stay away from them.

Dec 03 05:12 AM