Q1 earnings call: has eBay turned the corner

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eBay Q1 2008 Conference Call The upshot of the call was that the changes implemented by the new management team are starting to make a positive difference. Listings are up with conversions holding at acceptable levels, overall revenue for eBay is up 24% with PayPal revenue up 32%.

The figures aren’t as interesting as the tone of the call, the message coming across is that “We’ve turned the corner and the future is looking bright”. JD went to great lengths to distance current management from the past (Are investors pleased that Meg is no longer at the reins?) and that the current management have their fingers firmly on the pulse. Examples were given (e.g. category specific pricing for media sellers) of how they are listening and taking action where necessary.

Possibly the most important part of the entire conference call was right at the beginning when JD said eBay “need to grow revenue from existing customers”. Is this an admission that eBay are finding it hard (or will in the future) to grow active users? Certainly in the UK 14 million active users out of total UK population of around 60 million will be hard to grow much further.

Bob Swan, eBay CFO, came to the obvious conclusion that the best way to grow the active user base is not to lose existing buyers. That isn’t something eBay have majored on in the past but activity in the future will focus more heavily on retention. It’s hard to grow your user base if you lose buyers faster than you gain new customers.

Overall the message is quite simple, buyers are the most important commodity that eBay have and they’re going to look after them better than ever before.

2 Responses

  1. It should be music to sellers’ ears.

    “We want the buyers we have to buy more, more frequently.”

    Simplicity itself, and long overdue.

  2. Sure is Dan, there was also a lot of talk re discount coupons targetted at top buyers as soon as their activity on the site drops. Anecdotal evidence suggests ebay in the US and the UK have thrown a hell of a lot more coupons around so far in 2008 than they did in the whole of 2007. Anything they can do for buyer retention is good news to me 🙂



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