Can eBay Auction Off Its Laurels?

from the leaping-twenty-foot-chasms-in-two-ten-foot-jumps dept

The luster on eBay continues to fade. As mentioned in Bambi Francisco’s pessimistic long view on eBay, eBay’s traffic has been on the decline for 9 consecutive months, according to ComScore. EBay is in a tough spot. Tough competitors lie in every direction: Amazon and Overstock are mounting a frontal assault with their own p2p auctions while Google and Yahoo quietly build marketplaces and drain talent away from eBay. Faced with the spectre of decline traffic and revenues, eBay raised their rates for their sellers, angering one of the most vocal groups of eBay loyalists. Though not all sources indicate declining traffic (Alexa, for example), eBay is feeling the difficulty of sustaining continued growth infinitely. EBay’s operating income is almost twice that of Yahoo and Google; however Yahoo and Google have comparatively diversified revenue streams and opportunities. EBay needs to show that it can grow its revenue without simply trying to fleece their loyal seller base. EBay has not launched or acquired anything of note in the past few years (launching Craigslist clones don’t count). Then again, maybe eBay is just resting on its laurels — a business that makes over $1B in operating income a year is not too shabby.

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Comments on “Can eBay Auction Off Its Laurels?”

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Anonymous Coward says:

whats wrong with being an income stock

Too many big companies (e.g. microsoft, entertainment industry) never get out of a mid-life crisis when they reach market saturation points. If they would learn to say ,”Hey, we’re making lots of money. Lets increase our dividend rate and be happy” or, “Our revenue stream seems to have reached its natural summit, lets devote our energies into internal efficiency to raise our profit”. Instead they and their share holders only seem to focus on the rate of revenue growth. When you’ve got all the customers you’re going to get, the only thing left to do is to extract more blood from your customers (and drive them all away in the process).

JS Porter says:

Decline of Ebay

From my perspective, that now covers 51 years, a term in Viet Nam, 4 wives and about $12MM, all that exists is either coming or going…nothing is stagnant and stays the same. Moreover, if something is good and wonderful, wait a while because inevitably more and more people will want it and will without exception “Ruin It”. Yes of course ebay is in decline, it was only a matter of time.

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