Tony P.

Cisco: Perfect Home for eBay's Skype?

You do know that ebay has a court battle on its hands with Skype, right?

Their license to use Skype has been revoked, by the original designers. It seems that ebay didn't actually purchase the source code, just the rights to use it. Hey, $3.2B will get you only so much!

And another FYI: Current CEO John Donahoe joined ebay in Feb 2005 as President of eBay Marketplaces. He was very much instrumental in the decision to purchase Skype in Sept of that year.

It's best to not buy-in to press release blather, too much. Next you'll be believing that "ebay's roots" consisted of the Chinese mega-sellers (of crap) that currently infest the site.

Amazon vs. eBay: 2 Charts Say It All

Besides gouging their customers for less service, there's another big reason that ebay is so profitable. They are putting zero effort, and expense, into selling THEIR only product - ebay, itself.

No expenditure for advertising! And their "reward" programs for current buyers doesn't count as marketing. Bribing former buyers to stick around, with coupons that have more exclusions and restrictions than a "free timeshare vacation", is not advertising.

I've seen more ShamWow commercials in the last month than all of the ebay commercials, ever. What, is an expenditure of $100K just too much for the mega-corp with $3 BILLION dollars? Sheesh!

I've even seen a Buy.COM commercial on cable network TV. Now, it wasn't much, mind you, but their name did flash onto the screen for about 10 seconds - white letters on a black background, with no sound. At least it was something!

Ebay is doing what it has always done, more or less. Resting on its laurels and riding the wave. That wave has hit a serious stretch of calm sea and ebay's lack of previous business acumen is the storehouse of knowledge upon which they now draw.

While they could have been learning about the ecommerce business, they were instead off Empire Building. If what they need to do now doesn't require a failed exploit overseas, acquiring an entity they themselves cannot develop or offering more *FREE* spots to other mega-sellers, then they have no clue.

That's what investors should really be concerned with - ebay mgmt blindly grasping at the fix du jour.

eBay's Skype Fiasco: What Were They Thinking?

An FYI that is key info in all of this: John Donahoe joined ebay as President of eBay Marketplaces in Feb of 2005 (remember this date!). As such, he has directed what is called the Core to its present condition.

The *synergy* of Skype and eBay was easy enough to figure out BEFORE it was purchased, back in Sept of 2005. It's actually a simple test that (almost) anyone can do.

Do you like telemarketers calling you? If you had a yard-sale, would you enjoy phone calls about all of your $1 and $2 items?

If you answered NO and NO, then you understand why Skype was/is a flop for ebay.

If you aren't sure of your answers or if you let your maid do those "menial tasks", or if you answered YES and YES, then you are eBay CEO material.

It really is that simple. They (Meg W and John D) really are that clueless.

Amazon vs. eBay: 2 Charts Say It All

A more accurate measure of both companies' true worth and future profitability can be ascertained by considering where their respective Profit Margins are derived.

Amzn Profit Margin (ttm): 3.23% -- as a result of actual growth

eBay Profit Margin (ttm): 18.66% -- as a result of increased fees to its customers, amid negative growth

One has potential for sustainability; the other comes from a finite source. An ever-decreasing, bled-out source.

eBay Search: There's a New Sheriff in Town

The new sheriff may be full of all kinds of great ideas and common sense, but he still must obey the Master and Commander.

Gupta was/is one smart cookie - with enough common sense to restore one's faith in an MBA - but none of the higher-ups listened to a thing he told them.

But, then again, who knows?! Maybe Hugh can work the code in such a way that everyone can be happy. No? Well, I'd bet he could whupdashitoutta JD and that'd certainly make me happy. :-)

Amazon and eBay in Satisfaction Survey

Scot,

You've used the site since its heydays, you know that ebay has done this thing to Auctions, themselves.

For example, an upcoming "seller perk" is the inability of a non-payer to leave feedback. But, it's only going to be implemented for Fixed Price. ONLY FP.

Exactly what logical reason could be behind excluding auctions from that small degree of protection for sellers? There isn't one. And this is just one example of many more to come.

It's called Steering. Ebay is good at it, too. It's the MO behind the "paypal is the safest payment method" baloney. (aka vertical antitrust violation)

The categories enjoying the highest STR - coins, antiques, electronics - some hitting over 70% - do IT with auctions. That clearly shows the viability of the auction format - almost every dammed thing thrown out there is scooped up!

Meanwhile, all of the BIN/FP listings "enjoy" a miserable STR - most hover around 15-20% , with a high in the 30% range for just a couple of categories.

The only reason that FP constitutes appr. 60% of revenue is due to the volume of FP. It takes 25 FP listings to equal the revenue generated by a single auction listing, on average.

Just imagine how much better things would be if Auction sellers were to get a perk or two, every once in a while. While ebay does everything within its power to undermine the auction format, they run around with this perplexed look on their faces, claiming that auctions are dying.

No, they're not dying, not with a 70% STR rate they're not. JD is killing them and hiding the knife behind his back.

EBay In No Hurry to Spin Off Skype

"Skype is now worth more than it was a year ago, and will be worth more a year from now than it currently is," wrote Bernstein analyst Jeffrey Lindsay in a Thursday research note. "The more Skype is worth, the more value eBay shareholders can realize from it."


The more it is worth, the more value it has. WOW. That's a real gem.

Exactly how does one garner "value" from a non-dividend paying stock? Oh, that's right.. find a phool and his money.

eBay: Where Did All the Fun Go?

I'm a follower of the "whatever ebay did, they did it for an ulterior motive" school of thought. Obviously. Some might say I need a tinfoil hat. No worries, I have one. :-)

My opinion above does contradict Ms Pat's - she says that ebay did it for the sake of it's users. I say that ebay has never done one dammed thing solely FOR its users.

Early on in the SMI (Safeguarding Member ID) phase, several suggestions were offered as alternatives. One was to simply abolish SCO and make an announcement of that fact.

(For the record, there were some sellers that didn't like the idea of abolishing SCO, but even they agreed that it would be a small sacrifice to pay, to keep bidder IDs from being hidden.)

OK, back on point. Guess what the T&S VP said about that suggestion? That it wouldn't work because users wouldn't know that SCO was abolished. say... WTF?

Present every user that logs-in with a splash page informing them of it. Send out an email to every registered user. Have a banner proclaim it on every ebay page. What would be so difficult about that?

"users don't read - they pay no attention to banners - they don't get half the emails sent" Lots of excuses. (note the contradiction about banners not being effective!)

Funny thing.. ebay used all of those methods to announce their new TOS Policy, didn't they?!

Back on point, again. Some think that ebay wanted to keep SCO because of the revenue it generated, but I have to ask if that amount made up for the loss of bids that followed SMI.

Either ebay had no clear idea what effect the SMI would have upon bidding - OR - they wanted bidding (and thereby auctions) to falter - OR - they're simply morons.


You may choose any three options. ;-)
(Philip, can I put you down for all three? LOL)

Why Isn't Paypal More Successful?

I'm neither a paypal lover or hater; they are, what they are. I also don't 'hate' sharks.

The fact remains, some folks have been screwed. When screwed, it was for more-than a pittance. When they contacted paypal, they got the bum's rush. End o' story.

It really doesn't matter if it was "only" a mere .001 percent, that equates into thousands of people. And they tell eleven people, and they tell eleven people, etc.

And as far as combating these scenarios... **YES** - these things don't happen overnight. But neither did the problems.

Paypal has had ample time to much farther along the FIXIT path than they are, currently. They chose not to address these issues, many years ago.

It was the Expedient and More-Profitable thing for them to do. Now, they've supposedly changed their stripes. Good for them! Time will tell if it's too late.

For many, it is.

eBay: Where Did All the Fun Go?

Philip, I understand your point and agree with the dishonest nature of ebay's actions. I have read your AB post.

But (you knew one was coming, right?), I view ebay's actions differently. For quite a while now, they have acted, so as to cause a reaction. Look deeper within their action and you'll see their goal.

What would happen if everyone that uses ebay for auctions was to become fully aware of the scope and possibility of shill bidding? Auctions would die, correct?

Is that not what JD et. al. have been prophesizing all this time - the death of auctions? They want that. Or wanted it. Today they do, tomorrow they don't. Or vice versa.

They prolly view your ongoing mission as a plus in their favor. But I do understand your desire to educate others..

There's viable alternatives to the hidden bidder policy and you seem to be aware of that fact. Some of those alternatives would even open up auctions to the potential for more bidders, because quite a few experienced ebayers do know about shill bidding.

The amount of money kept from the site due to "shill bidder concern" is more than whatever money is gained by that shill bidding. It has to be - every seller knows that bidding has fallen off since hidden bidders was implimented.

A viable alternative would mean more bids, more money and more revenue for ebay. But ebay doesn't choose that route. Why do you think that is?

eBay: Where Did All the Fun Go?

I'm late to this party, as well. I got two good takeaways from this most-excellent article.

"But the real and simple reason is eBay is no longer fun."

".. and others, myself included, were all too alienated by eBay’s bureaucratic and political MBA culture."


Keith, believe it or not, that culture has gotten worse. It was what killed ebay 3.0 - killed by the Prez of Marketplaces. None other than the Donahoe.

BTW - I joined X-COM as a member in 2000. We were kicking the azz of ebay's Billpoint, weren't we? Good times!

Is eBay's Real Threat Amazon or Classifieds, or Both?

I'm late to this party, but I feel compelled..


Scot, you have it right. eBay's real threat is both Amazon and online Classifieds. And the recession. And high postage fees. And the fading novelty of auctions. And all the other factors that have been mentioned, for years now.

But add them all up and ebay should still be doing what IT did back in 2000 - making sales on an increasing scale. Except for one thing. Whatever factors IT had a hand in Creating.

IT drove many sellers to CL, and still does even today. IT drove many sellers to Amazon, and continues to do so. Those sites would have seen a natural influx over the years, that is true, but ebay created an unnatural stampede.

Not surprising to some, I'm sure, but I can find partial blame on them for the dramatic rise in Postal rates. Indirectly. Back in 2005 when the USPS started to see mega$$$, they let their opportunistic thinking get the better of them.

Ebay should have formed a partnership with their sellers and the USPS to keep rates down. Their (ebay's) influence could have made a difference, but they were off on M&A buying sprees and didn't give a dam about the Critical Mass.

That $2.6B frivolous expenditure will always remain as a moment when ebay could have done so much better than IT has become. IYKWIM. A pivotal point, pissed away.

Now it's the Noise's turn and they don't give a dam about ebay.

Why Isn't Paypal More Successful?

I became a Paypal member when it was known as X-Com, back in early 2000. Part of the first 250K users, I got $5 for every referral; I made over $200 by the time that program ended. I know a thing or two about Paypal.

They know quite a bit about me. My CCard #, my SS #, my checking account # and all sorts of personal data. I have used them for a long time, but I have never trusted them for a single minute.

They have no principles. That's primarily due to their association with ebay. True, most of my distrust stems from a "seller's point of view" and how I am at their mercy; even when they may know The Truth, they will typically rule in favor of Expediency.

That commitment to Expediency, rather than Truth and Fairness, is a double-edged sword, at times. It can sometimes cut the buyer - one that has been scammed by an unscrupulous seller of bogus goods.

The Paypal employee's comments above may be factual, but they neglect one basic point. It may be true that only a few people are left to twist in the wind, but the majority of that "few" has most certainly been fleeced, Big Time!

Scammers don't usually make it a habit to ply their trade in the Nickel and Dime market. If you get scammed, and you have no CC company to fall back on, you will be out a considerable sum of money.

Then you'll be talking to "Jim" (who has a curious Punjab accent), after 4 phone calls and twice as many disconnects, who tells you that *if* paypal can get the money back from the Seller (scam artist now enroute to parts-unknown), then You will get your money back.

And not one dammed minute sooner.

StumbleUpon's eBay Spinoff Valuation: $29 Million

from over on The Fool's website...

I heard somebody screaming: "Buy high, sell low" and in a lickity-split moment I just knew ebay was being mentioned.

sho 'nuff

But Hey!! Their stock's still going strong, so what's to complain?! Second straight quarter of losses (worse than the last, actually) and all they needed to do was beat the estimates, to look stellar.

The bar is now set at "non-tank". That's much easier than double-digit growth. JD thanks you all.

eBay's Earnings a Successful Bid for Market Leadership

Evidently, not everyone is fooled. ;-)

www.fool.com/investing...


"Investors falsely believe that names like Dell or eBay (Nasdaq: EBAY) will see their relative valuations return to their headier days. They won’t.

Why? Captain Obvious would say that growth has slowed, technology evolved, and competition emerged. But all that misses the real reason. Instead of returning incremental profits to shareholders via dividends, such companies wreck shareholder value by chasing growth through overexpansion and high-profile acquisitions. Oh, and the ill-timed share repurchases that exist primarily to juice per-share earnings and help sop up all that stock option-driven dilution."


The investor nazi says, No dividend for you!