Archive for the ‘eBay:’ Category
EBay Boycott Fails, Profits Soar
Posted on: May 12, 2008
eBay has the last laugh at its sellers expense, throws a bit of sand in boycotters faces with earnings report
Apparently, eBay’s policy changes are having desirable effects, despite the massive public outcry the company received. While the company cut its listing fees, it more than made up for it by significantly raising its commissions on successful sales, particularly on low-priced items such as video games and CDs. The higher rates along with the elimination of negative seller feedback to the buyer created outcry among many loyal eBay sellers.
Some sellers tried to boycott eBay. Initial metrics seemed to show the boycott to be working — listings were decreasing and sales were down, by most official counts, although eBay insisted they weren’t.
However eBay soon rebounded and resumed largely business as usual, despite having lost a few loyal sellers. As DailyTech‘s Shane McGlaun wrote in a blog, sellers really had few choices — Amazon.com only allows resale of select items such as CDs or books, and Craigslist.com is avoided by many, due to its unseemly reputation as a hotbed for illegal activity. Most sellers were stuck with eBay, whether they loved it or hated it.
On Wednesday, eBay CEO John Donahoe announced a stronger than expected earnings report, with the company reporting $2.19B USD in revenue, a 24 percent increase over Q1 2007. The performance significantly beat analyst expectations. Net income also rose 22 percent to $562M USD.
Despite the boycott, listings jumped 10 percent to 647.4 million, which eBay attributes to the listing fee cuts. However, eBay did admit that its “conversion rate”, the percentage of sales ending in success, “declined only slightly”, though eBay would not reveal exact figures. The total “gross merchandise volume”, a metric measuring the value of goods sold on eBay and associated properties, experienced 10 percent growth to $16M USD
However, while eBay may have a bit of grounds to gloat over the boycotting sellers, the long-term outlook for the company is not quite as peachy. In 2008’s first quarter, eBay had 83.9 million active users, up just over one percent from last year, at 82.9 million users. The stagnant growth indicates that eBay may be reaching the market saturation point.
For a company at a market saturation point, customer satisfaction becomes increasingly important. EBay CFO Bob Swan noted, “We’ve concluded that the best way to grow our active user base is by not losing any of them.”
However, while Donahoe may not want to lose his users, his company’s policy certainly threatens to send some users packing, or at least slow growth further. Next month, the company will eliminate negative feedback from sellers to buyers, taking away a major tool which sellers could use to safeguard themselves against malicious customers. While Power Sellers will have some new protections, normal sellers will find themselves in a much more dangerous situation, at the mercy of their buyer’s reviews.
- In: Craigslist | Diluting | eBay's | eBay: | Stake | Sues
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ebay and Craigslist fight it out in court over ownership percentages
Craigslist and eBay are seen in many eyes as direct competitors, but despite the competition between the two eBay holds a minority stake in Craigslist. A 2004 purchase grabbed eBay a 28.4% stake in Craigslist.
A suit filed by eBay this week against Craigslist alleges that the Craigslist Board of Directors, consisting of only two members including founder Craig Newmark and chief executive Jim Buckmaster, took action to dilute eBay’s stake in the company.
According to eBay unspecified actions taken by Craigslist have reduced eBay’s stake in Craigslist by more than 10%. ebay asked the court to reverse the actions of Craigslist to protect eBay’s investment and preserve its stake in Craigslist.
Reuters reports that a blog post on Craigslist stated that it was surprised and disappointed by eBay’s allegations that reportedly came without any dialog with Craigslist. The blog post continued saying, “[the lawsuit by] a company that views Craigslist as a prime competitor … seems unethical, and suggests ulterior motives such as a hostile takeover of Craigslist or the sale of eBay’s stake to an unfriendly party.”
For sale on eBay: Nuclear biological protection gear and other cool stuff | ZDNet Government | ZDNet.com
Posted on: April 11, 2008
- In: biological | cool | eBay: | for | gear | Government | nuclear | on | other | protection | sale | Stuff | ZDNet | ZDNet.com
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eBay auction. Item: F-14 Antenna. Winning bidder: Mahoud A.
For sale: Nuclear biological chemical gear. Contact anon1234@craigslist.org
eBay auction. Item: Small arms protective inserts. Winning bidder: Hu J.
These are just a few of the items the Government Accountability Office discovered for sale on eBay and Craigslist. There is much more, much of it stolen from the US military, sold to fences and eventually resold on the Internet. The GAO says in a report to Congress (PDF):
“Military-issue items bought on eBay and Craigslist on display at a House hearing. (Credit: Anne Broache/CNET News.com)
GAO investigators also identified examples of U.S. government property that was stolen and sold for a profit rather than being utilized by DOD. For example, GAO found two civilian store owners who acted as conduits for defense-related property that was likely stolen from the military. The store owners told GAO they purchased gear from service members—including Kevlar vests, flak jackets, and gas masks—and sold it through eBay to the general public. GAO also purchased stolen military meals, ready-to-eat (MRE) and found a robust market for stolen military MREs on eBay and Craigslist.
The GAO says Iran is a likely bidder for that F-14 antenna, as it’s the only country using F-14s. Bidders from Hong Kong, Taiwan and Singpore have won those small arms inserts.
Rep. John Tierney (D-Mass.), who heads the subcommittee that called a hearing on the report Thursday, expressed concern that these items could be used by terrorists. He cited an episode where Iraqi insurgents dressed as US soldiers entered a security post and killed five soldiers.
But it’s not illegal to sell many of these items, defense officials said at the hearing. It’s legal to sell body armor and night-vision goggles. And soliders are free to sell their uniforms after leaving the service.
It would be “very hard to tell (soldiers) that you can’t resell that item when they’ve purchased it with their own resources,” said the Army’s Sarah Finnecum.”
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