eBay Q4 Earnings Call: How eBay has changed

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eBay have once again beaten expectations on their earnings with their Q4 Investor Call reporting revenue of $3.38billion, above predicted $3.32billion and up 35% from a year ago. Q1 which will be reported in April isn’t looking so rosy though with eBay forecasting $3.05 billion to $3.15billion, below industry expectations of $3.16billion.

That’s all pretty normal though, eBay always under promises and over delivers on earnings, or has done for as far as I can remember so it’s business as usual.

What was more interesting was some of the titbits later in the call. One question concerned eBay and specifically PayPal management. John Donahoe proudly pointed out that since he took over from Meg Whitman he’s scythed though top level management and replaced 75% of the top 100 eBay executives. Whilst on the face of it it’s good to weed out the dead wood, it does go some way to explaining why eBay is changing so much and why many of the long term sellers are complaining.

eBay has changed and will continue to change and the new management haven’t experienced the old eBay from where it grew as an online auction business. They are all about “Buy it New, Buy it now!” which is the direction in which John Donahoe is steering eBay today.

The next interesting point is what’s happening at GSI, the ecommerce platform that eBay purchased in March 2011. GSI have some of the worlds biggest brands in retail on their client list and eBay aim to bring these brands onto eBay.

13 GSI merchants are now selling on eBay, and eBay are gunning hard to bring more GSI retailers onto the site. By definition GSI merchants are all huge retailers (otherwise they couldn’t afford the solution) and so expect to see ever increasing numbers of retail giants competing with you on eBay.

eBay had changed over the ten or so years I’ve been using the site and it will continue to evolve, but it’s changed more in the last five years than it did in the previous 10 years. John Donahoe talks about his so called “inflection” point that ecommerce has reached where consumers are changing the way they buy – mobile, convergence of online and offline commerce and a seamless multichannel world. The question you should be asking yourself is how will you compete in the ecommerce world of 2012 as it’ll be very different to 2011.

11 Responses

  1. When a company is growing and developing and in that juvenile stage it is likely that the Upper Management is imaginative and forward looking. When these go it is usual that they are replaced by essentially “Bureaucrats”. They may be good with the paperwork but lacking in the imagination. The statement that 75% of the top 100 ebay executives have been replaced could go a long way towards explaining why the imagination and drive has gone from ebay. Perhaps ebay needs another clear out at the top. This time the bureaucrats should be the ones to go to be replaced by younger(and perhaps not so young) executives with ideas.

  2. We have two hopes for Ebay to become the viable platform it used to.

    1. Current management leaves.
    2. They get bored with Ebay and decide to sell it…

    Having read other articles on this, I wonder how much growth is just fee increases.

    Ebay seems stagnant compared to Amazon.

    I still do not think the current management understands that the old Ebay was indeed a community of buyers and sellers.

    Donahoe it seems just wants an electronic mall where only the big boys get to rent the shops.

  3. To me it begs the question: Is there anybody else to pick up the On-line auction business that ebay seem to be dismissing or will the on-line auction format just die into a distant memory ?

  4. I had a similar thought.

    Ebay created the online auction format for small sellers.

    Now they seem intent on destroying it.

    No one seems interested in the market, other than Ebid.

  5. “They may be good with the paperwork but lacking in the imagination. The statement that 75% of the top 100 ebay executives have been replaced could go a long way towards explaining why the imagination and drive has gone from ebay.”

    I couldn’t agree more! Well put.
    I’ve just written a magazine feature on how eBay has changed, and how sellers can adapt to scale, but sadly I didn’t have room to address the possibility that some of the entrepreneurial “imagination” has disappeared from the site. Many of the recent changes are for the better, but certainly not all, and more could be done to keep savvy sellers happy.



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