Loss of auction interest hurts eBay
Stock in eBay is slipping as consumers trend towards hard price tags over the chance of an auction. So analysts anticipate eBay to start nurturing PayPal, its other business. Amanda Aronczyk reports.
eBay logo (Sean Gallup/Getty Images)
TEXT OF STORY
Bill Radke: One stock that has been hammered lately is eBay. It seems more consumers are preferring price tags on their online items rather than taking their chance on an auction. Well today, eBay has invited financial analysts to its headquarters in San Jose to try to win back the hearts of investors. Marketplace's Amanda Aronczyk has more.
Amanda Aronczyk: Remember the thrill of winning that rare Beanie Baby at your first online auction? If you're like most consumers, that thrill wore off pretty fast.
Christa Quarles: The problem is that people don't want to wait a week to find out whether or not they got the item, they want to kinda get in and get out.
Christa Quarles tracks Internet companies for Thomas Weisel Partners. She says eBay has struggled this past year while its main competitor, Amazon, has grown.
Both now sell fixed-price items. But, she says, Amazon is where people look first. And eBay's auction marketplace -- what it's best known for -- it isn't the moneymaker it used to be. So today, analysts expect to hear a lot about eBay's other online business: PayPal.
Quarles: We've kind of joked that they're essentially going to change the ticker to PYPL, i.e. focus on the PayPal business away from the marketplace business, because there's just, there's not really a positive story there.
Quarles says that PayPal generates a third of eBay's revenues. And, she says, it has the potential to become an online payment franchise to rival Visa, MasterCard or American Express.
I'm Amanda Aronczyk for Marketplace.
Comments
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From San Rafael, CA, 03/28/2009
A serious issue is that eBay sellers have limited online marketing options outside of eBay because of contract limitations (they cannot link from Google Adwords to their eBay auctions, etc). Also, the only way they can make money is by selling product, while competitors are monetizing their traffic in many other ways(affiliate, PPC...). The answer is for sellers to drive traffic to their *own* marketplace while using eBay to facilitate the transaction.
Whether you're a beginner or a pro, ClickRiches has powerful features that will allow marketplace sellers to quickly and easily build, publish and manage their *own* marketplace based on their eBay listings along with optimized affiliate, merchandising, and content widgets. www.clickriches.com
From BC, 03/11/2009
Auctions are still hot - they're a massive business world wide - Christies, Sotheby's, Bonham's, Waddington's, Barons, all the local auctions, farm auctions - it's a massive and lucrative industry - EBAY had the chance to take it all over - worldwide - they were getting there. But I guess the young MBA's just didn't have much realization about where the real money is, and little experience of the world - anything not new from China is a "flea market" item - gad! No problems with the burgeoning auction business - it's EBAY's management.
From hartselle, AL, 03/11/2009
It's not the wait to see if you win or thrill of winning thats gone -it's ebay thats ran its own customer base away from their site. They allow way too many ''crooks'' to operate and get away with ''cons'' that you don't have to deal with on amazon or other sites. Almost everyone except ebay[blind eye] is aware of the problems and we shy away from having to deal with such. The net is a wonderful place...you can always find someone else to do business with thats doing it right !
From Indianna, IL, 03/11/2009
I didn't lose interest in auctions - I never lost interest in auctions! I lost interest in the way eBay runs its business. I will never frequent the site again.
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