Marty

eBay Is a Winning Bid - Barron's

Thanks Paticia, I know so many people that feel the same as us. As long as we are still around, Ebay still has a shot, but as the last of the last lose interest, the driving force disappears.

My email is [e-mail] keep in touch!

Marty

eBay Is a Winning Bid - Barron's

Patricia you are right about multiple user accounts. This makes the problem of Ebay's "active users" even more pronounced as many of those active accounts are just duplicate user accounts set up after Ebay introduced the stores product.

This sort of user meltdown was apparent and the main cause for the demise of AOL which was once thought never to lose their lead just as Ebay was.

It becomes more and more expensive to grab new users when existing users become less active or leave the site.

It is critical that Ebay realize this and stop pissing into the wind.

They need to capture the buying community in ways only they can and let people know through creative marketing and ads what they can buy on eBay.

Sellers need to have a place which excel in service but also in opportunity.

Back in 2006, Bill Cobb then President of Ebay North America, announced "store inventory would be going into Core search, in Jan of that year" . That quarter, which was awesome for sellers, saw and increase in Gross merchandise volume (sales of all sellers) and it even beat the holiday quarter that preceeded it. Sales exploded and new inventory was swamping the site. More hits for items newly searcable was pulling millions of store item up through google rankings and it was feeding on itself

A few months later, Ebay citing non-existant (in my view) "buyer confusion" realized that if it sold too much too quickly ,they would lose tons of money from people listing items over and over that DID NOT SELL. Yes, revenue from items that do not sell was declining as people could list cheaply and get found and sell. Our sales shot up from $1500 a month to $4500 like nothing.

Ebay reversed their "experiment" then slammed their own sellers by saying "store inventory was "slower , less desirable" etc etc.

Combined with fee increases, this change started the process of a migration to Amazon. New Amazon sellers took root, found success and then more followed. Ebay handed them this business.

Within a few years of its Start, Ebay Stores grew to be the largest web based merchant mall in the world, perhaps the biggest internet web success story ever.

But within months, they were talking about it like an old shoe, because the revenue model was such that the relisting of items that didnt sell over and over was so profitable that they couldnt forgo the revenue.

I begged for them to keep the system and change the fee structure as things were firing on all cylinders then. Instead they kept marching down that path, angering many of their best users, reversing a major decision then belittling their items.

Now they see GMV in decline, a user base went from 41% active to 18% active. Non-existant advertising and marketing campaigns, a 10% cut in their workforce (mainly good community orientated people), and despite plowing 4 billion into stock buybacks at prices way above where the stock is today the stock is still down 50%.

People who really know Ebay know what is going wrong. No one will listen though. It isnt that its a bad company, its that its losing the interest of the buying public and unwinding in much the same fashion as it wound up, and much like AOL unwound. The tipping point may have been reached but I am an eternal optimist and hopeful that sensability will return to management.

The employees at Ebay , when energized would return like horses to water in the desert. They are thirsty for a business model that reinvigorates this company just as users like I am . I have spoken to manhy of them and they feel the same but sometimes differ in their approach.

I wish them luck of course, but right now the same people that cash out on companies (BAIN CAPITAL) are running the show and Id look carefully at how they do things to see Ebay's future.

Marty

eBay's Skype Fiasco: What Were They Thinking?

Can you say MICROHOOBAY??

Marty

eBay Is a Winning Bid - Barron's

Oh and I met Meg Whitman! LOL I liked Meg!

I havent med John Donahoe so I cant comment on him. Id love to meet him and combine what he is doing with what needs to be done for the community. JD can reach me at [e-mail] LOL

Marty

eBay Is a Winning Bid - Barron's

Ebay is a great company with lots of potential. However their current course over the last few years as been one that alienated their users and one which was in direct conflict with what brought them success.

If you really want to know what is going on with eBay just carefully reviews the total registered users and active registered users.

In 2006 41% of their users were actively trading (buying,selling listing items on the site in a 12 month period. Now that number is like 18%. There is incredible user churn. When I noticed active user growth was going to turn negative they actually took the numbers you needed to see this churn OUT of the quarterly reports. They just returned this quarter.

This company can do extremely well once they get a course which does the following..

1- Actively addresses the "Local" markets which can be a whole new reason to "Ebay" .

2- Really opens the global marketplace not hides items from country to country

3- Brings its users (buyers and sellers) into wanting to trade here as opposed to elsewhere through effective advertising auto-affiliating active users to have them participate in the growth of the site.

4- Stop tinkering with trying to show people what they want to buy and ruining the broad nature of the "find everything" marketplace they created.

One example, on a local site for Ebay all Ebays properties could benefit, rent.com, tickets through ebay tickets or stubhub, real estate , new service areas, restaurant certificates etc AND whole new areas of trading like larger harder to ship items like furniture and other heavy things.

Also by auto-affiliation here is what I mean. Many users are turned off by ads plastered all over the site, even on users own listings. Make sellers part of the team by cutting them in an ad revenue for ads on their listings, on content they create to showcase their items and on cross-sales of other customers items found through their items AND on new users that sign up from seeing their item.

This would make Ebay the only place where sellers could benefit from sales of items, content ads, cross-sales, and new users. It would make each item placed on the site more valuable.

There are amazing people working at Ebay. There are great people active in the ebay community. But most people I know with a good understanding of the site feel the same way I do. And its not an "Ebay hater" thing, its a concern for a great place going in the wrong direction.

Experience...

Seller on Ebay since 2004
Trading assistant on Ebay (sell for others)
Owned Ebay store since 2005
Wife was an Ebay Teacher (Educational specialist)
Member of focus group for Ebay
Sold over 7,000 items on the site, feedback over 5000 100% positive.
Leader of one of the best seller groups on Ebay
Featured in a few books on Ebay
Winner of 2007 Ebay Hall of Fame Award
Bought hundreds of items on the site.
Introduced hundreds of people to ebay through classes and friendship

Marty

What Will Become of eBay?

Well , there are many reasons I like Ebay but the author has the 39% listing growth WRONG. Ebay created a new format 30 day fixed price listings. As a result many listing that would have expired in 7 days now last 30 days making the numbers look higher. Also many of those listings are transfers from Store format due to the new longer format and cheaper prices. You guys really need to work your numbers with people that understand the different formats and pricing.

For example a year or so ago CORE format (auction/fixed price) was once about 70 cents (35 cents to insert it 35 cents for a gallery picture) for a 7 day listing. NOW , they eliminated the gallery picture fee so the fee is 35 Cents for as long as 30 days. Of course listing numbers are going to be different.

The decline in traffic and slower unique visitor build is really the guts of the problem and one Ebay can correct. This is the most poorly marketed brand name on the planet. They squandered goodwill, hurt their base, advertised poorly ,never appealed to the second generation internet people and youth and gummed lots of things up.

I can say the people that work for Ebay for the most part are awesome (both past employees and current ones). Some have a feel for what must be done and what has gone wrong. Some changes have been made and more will come.

This stock should be humming with a downturn like this as it creates tons of supply of low cost stuff to buy and buyers are seeking low cost stuff in a downturn as well.

Incredible collections of collectibles are coming on to the market for the first time in a long time and if Ebay could get on track it could use this downturn to it advantage.

I hope for the best for the people at Ebay and their shareholders.

Marty

'Too Much House' Buyers To Be Rewarded?

While I do agree the "plan needs work" , the plan with a payback of some kinds might make sense. However the whole article misses the point.

This downturn is NOT about Subprime mortgages and housing, that is the symptom of the disease which has been the decimation of the good paying job market for 10 years.

I am a CPA in CT . In 2006 the savings rate in our country went negative for the first time since the Great Depression. Inflation had been running way higher than cost of living increases. Decreases in benefits and pensions offered by companies also hurt.

The average person became unable to pay their bills. Many FIXED mortgages are defaulting and PRIME defaults now outnumber subprime defaults.

The problem is not the house cost as most borrowers can just call up their lender and get a legit modification right now. ITs the cost of everything else.

When I moved into my house the cost of a tank of heating oil was 200 bucks, it rose to 1000 bucks and now its about 800. Gas was 1.50 a gallon and rose to 4.5 (now down to about 2.60) . Property taxes were 3000 now 6000. . Food went out of control this year.

In the 1970s inflation resulted in huge increases in the cost of living adjustments for social security recipients. From 1976-1986 I believe COLA increases were 75% . My father who worked for the Govt at the time had even higher COLAs with his performance based increases.

So you could be ten years later in an inflationary period and be making 75-90% more to pay your fixed debts.

This is how we crawled out of the last inflationary period into growth. People had higher incomes to pay mostly fixed debts.

THis time around due to outsourcing , and limited investment by our country in THIS COUNTRY, people have gone backwards in income and many at best stayed equal or fell behind inflation. Social security only received about 30% over 10 years in increases while their costs soared out of control. At the same time medicare premium increases ate up a chunk of that as well.

This is the root of the problem. At first people borrowed on credit cards some and paid it off with bonuses and sometimes home equity loans. As things got worse, people got stuck with every larger bills. Millions of high paying jobs have been lost. In 1982 80% of jobs had company or Govt paid for pensions that number is like 18% today. Most had medical ins. Today people are lucky to get it and usually have to pay towards it.

Unemployment doesnt measure underemployment.

The bottom line ? Until this country invests in infrastructure, alternative energy, energy development in general, the space program etc etc we are not going to see a recovery.

The standard of living is evening out across the world due to the greed and concentration of wealth once again the masses cant afford life in the USA. This means prices will adjust dramatically and people will just not spend.

We have stood by while more debt was added to the federal deficit in 8 years than in the last 200 of our country and while the uber rich got richer without the need to invest in new companies here in the US due to outsourcing.

We watched our Pet food contain poison, our kids toys contaminated with lead , all because we could get it cheaper from China.

Well the new news is Amercan workers are going to be as cheap as the new China, welcome to the new America.

Like I said its not SUBPRIME mortgages , its a symptom of the jobs , opportunity mix here. As always the same Govt that just a year ago told you the "economy was doing well, the jobs market was strong" is telling you its the "sub-prime mortgages"

The same people that told you we were "running out of oil" and "China was using all our oil" when $147 dollars a barrel oil prices were bankrupting the middle class, and encouraged you to "drill more NOW" while oil now is sitting at $64 bucks a barrel

The same people that give 25 billion to Citibank on the verge of failure only to allow them to pay 25 billion in bonuses ..

The Greed, speculation, concentration of wealth , corruption, selling out of the manufacturing base , war , all without an investment in the future of our country's new industries has been and is the problem.

We have been left with a huge mess, leaded kids toys, poisoned pet food, a bunch of rich people on TV trying to explain why they have hundreds of millions in salary while their companies failed and a very divided public.

Marty

[e-mail] (feel free to write)

Signs of an Economic Bottoming Process

Hey Dominic , great job. I agree with your info here. I am a CPA in CT in the northeast and have been posting about how bad this economy has been for 2 years now. Now that the media, and Govt are aware of the problems it seems to churning and on the way to a recovery. Being on the ground floor with clients in many industries I can see the news will still be glum as this process begins. In Feb of 2008 I saw things as being quite bad. Since the federal reserve aggresively cut rates I have seen more of a mixed picture. I actually have some clients doing better, some worse but not the straight downhill picture. I also see the cash crunch a little better, but almost dipped again with the late summer credit crunch.
Marty

Buffett and Cramer Agree: It's Time to Buy Stocks

People have short memories. Cramer's people got wiped out in the internet bubble. The CNBC chat boards discussed it for years til they buried the board. At the time, Cramer said Amazon.com was going out of business. I emailed that they were not , and would be one of the survivors. Later it became one of his four horseman of tech.

He recently (like 3 weeks ago) called a bottom. Anyone that backed up the truck had the truck fall on them.

Cramer is a smart guy, decent guy, and I dont think many people have his degree of market knowledge. However when things are in this type of mess following any "leader" could be disasterous. People were "playing the market" like the lottery and the "Fast Money" crew was even worse. Heck they were riding that clearly speculative bubble from stock to stock (the coal, the fertilizer the oil etc).

While this might be the time to invest, Cramer thought it was weeks ago as well. This might be the one time that surprises everyone and proved Cramer wrong yet again.

A credit induced liquidation for cash is not a usual market event.

We all hope it gets better, and I hope as this article states , better times are coming as per these two men.

Marty

eBay Is a Losing Bid - Barron's

Incredible potential, incredibly being wasted in my opinion. Great people working at ebay, lots of good idea burried , its customers ignored. Not sure what will turn this around but I wouldnt count them out, they need to get back to the roots of how they grew, from excitement, word of mouth and making Ebay a great place everyone wants to be.

Another huge issue is that with seller contentment way down, other factors like the worst economy since the Depression have Ebay taking the heat for all problems even though generated by less consumer spending in a bad economy.

While people do unload junk when the economy slows down there seems to be fewer reasons to unload it on ebay. Few if any bids, constantly changing direction etc. The fastest growing areas of the market (local trading and buy online pick up in person/store) were persued by Ebay as "Ebay Local" announced, then burried while Craigslist grew at 90% over the last few years.

The potential is here, I am not really sure what the problem is. You need people that understand why Ebay worked to replace the consultant types, or at least take them somewhere and hit em in the head with some water balloons! LOL

Marty

A Rustbelt Revival: From Doom to Boom

Excellent article. Finally a glimmer of good news that isnt just a misleading statistic. This subject deserves more research thanks for your thoughts here :)
Marty

Housing Crisis Likely to Wipe Out Two Decades of Family-Earned Wealth

Id argue that housing is sympton not a cause of the wealth wipe out.
The outsourcing of jobs and inflation running well over announced rates combined with a lack of investment in this country has produced a situation where costs of living are way in excess of the ability people have to pay their bills. Sub-prime borrowers were just the weakest link. Look at AMEX and other banks recent news on their prime borrowers increasing their defaults. When gas, heating oil and the cost of food soar to create another monthly mortgage amount something has to give.

Much of the divide between the "high saving types accusing the younger generation" and the "wasteful types in the young generation" is merely because the former rode the bubble up and cashed down.

My dad bought his first home for 20k, sold it for 60k, his second for 107k (a real stretch for him at the time) and sold it for $450k.

Many people like him only had money because they could tap the equity to send kids to school, trade down to cash out to retirement.

Some of this younger group gets out a college which costs 10x as much as when their parents went, into a housing market which was high and if everything else didnt go haywire they would be able to afford the mortgage as well.

Right now the lack of opportunity, outsourcing of not only manufacturing but service jobs as well, combined with a total lack of investment in the infrastructure and technologies of the future here at home has led to a longer term problem that wont be easily fixed..

MA in CT

Amazon Checkout: Stiff Competition for PayPal?

Scott, excellent post, great job with the pros and cons. I do not always agree with your analysis on things but you did an excellent job here. :) - Marty

PS Are you seeing any trends with the economy from your end? Less high end buying? More emphasis on free shipping? Any movement to the Walmart/Ace hardware shop online pick up in person? Thanks! [e-mail]

Housing: No Bottom Yet in Sight

I say we have Iraq pay back some of the War Debt. When we started these Wars with Saddam oil was at $20 a barrel. Now we have liberated them and gave them a 700% increase in the price of their #1 resource. What would have happened if oil prices stayed the same? Surely they can afford to pay back the war effort with these inflated prices.

Probably the only thing I see in favor of the housing market is the extreme negativity , which usually means things might be close to a bottoming process.

What we need in this country is fairly simple..

1- Get these bozos out of office. Give me Obama or McCain, anyone with a brain, a mind towards tending the record deficits and working across the aisle with the other party. This is America, not red nor blue states but people that can and will work together to solve problems.

2- Start Building the "NEW AMERICA" we need

a- Infrastructure spending
b- Reinvigorated Space Program
c- Alternative energy development on a grand scale

We have spent many of the last years fighting a war with no material benefit, we need to invest in this country once again and also repair our image in the world.

As a CPA in the northeast I can say the economy will be a huge challenge. I see the main problem is the concentration of wealth. Through outsourcing and exporting, large companies maintain wealth but distribute to far fewer here in the US.

The profits of US companies are a subject for study in themselves. In the early 1980s 85% of jobs provided a company paid for pension and most had full benefits for insurance. Now 15% have company pensions and maybe 20-30% have full medical coverage. The more you take out of the pockets of workers the more "companies seem to earn" the multiple of which accrues to shareholders.

401k wealth for most is a myth. 52% of 401k holder took a premature distribution last year. People are tapped out, this country has suffered the biggest period of mismanagement in its history.

What worries me most is the group that stands to benefit from keeping the status quo. Before the last presidential election they pulled the Thurs evening Bin Laden video out, this time from what I read and hear from others it will be worse. An incoming Obama might lead to a pre election war with Iran or an elected Obama a post election pre inauguration war. Those with the money and power dont give it up easily to those seeking the level playing field and America for all.

Id just remember what I said and hope that come next January you can all say, gosh he was wrong (I hope). IF you want a Depression the war scenario is the one way I see that happening. Absent that nightmare scenario I see either new man bringing us out of this mess.

MA in CT

Historic Financial Collapse Underway?

Great article! I wanted to add some stuff .

- In 1999 the Nasdaq was 5000 its 2200 or so now. In 1989 as the Japanese real estate bubble burst the Nikeii Average was 40,000 its 18,000 now 20 years later. Their real estate market retraced 20 years of gains as well. I feel it is not totally out of the realm of possibility that a much longer recovery trend like that in Japan can happen here.

-Regardless of the economy there are other factors -HUGE outflow of investment funds to baby boomers retiring. These people were able to save more than the next generations AND had the benefit of company pensions (also invested) that will now be coming out of the market just as new money in gets tougher as people cant save.

-Additional Risk - State and Local revenue -People are not driving on toll roads as much and they need to raise tolls. Property taxes are going to be a nightmare to collect, and sales taxes are down. There are some serious risks in that environment to state and local Govt spending (and related bonds etc)

-Not sure if I agree on the gold thing. The last year has shown you might have been better off buying food that you can store , things like rice , flour etc LOL But there is a valid argument in the currency collapse market.

THOSE THINGS SAID...

As a CPA in the northeast part of the country I have seen this mess coming for over 2 years. Just like the signs were clear to me 2 years ago I am seeing some limited signs of the seeds of recovery taking place. It could very well be far off but let me tell you about the few positive things I have seen..

1- The small business credit crunch seemed to ease when the Fed lowered rates. I dont know why but between Oct 07-March 08, it seemed like noone had money, now people seem to be hanging in there .

2- Some clients are reporting better sales (surprising even themselves). In the last 2 years I have not had a handful of people telling me anything good the same day but I am starting to get those reports.

3- Some new business formation is going on.

4- Looked into details of some financial stocks reports. IT appears to me that places like Citibank and Merrill Lynch are 6 months away from a turnaround. For example, Merrill has reported 40 billion in some odd losses already. They only have 4 billion or so left in CDOS in total.

5- Private people (like Boone Pickens for example with the Energy plan) are starting to step up to the plate with ideas.

There is an all bets off death scenario though. That is if we get involved in another war. Then I think its over.

Id like to state one more thing..

from a year ago to about 6 months ago the Govt essentially lied about inflation, unemployment and the jobs market.

Now the facts are out there. At least people are playing cards with the reality deck now. The risks are out there. Just articles like this one might show a bottoming process.

I have been very negative on things but call it as I see it. I do see some things moving in the right direction. It might be a dead cat bounce as they say but I am hopeful that we are wrong and things will turn, everyone makes out better that way and ill eat crow anyday over not having anything to eat!

Marty