Jan 27, 2014

Has eBay Lost Its “Auction Edge”?

I miss Meg Whitman. You remember Meg: She was president of eBay back when it used to be an auction site. Meg’s philosophy was that eBay was in the business of connecting people with people; i.e., person-to-person trading. Ms. Whitman’s vision ended five years ago (2008) when John Donahoe took over eBay as CEO. Now, eBay’s mission is to connect corporations with consumers and boost eBay’s stock price.

Of course, I’m a firm believer in profits, and I support eBay’s right to pursue them…but not at the expense of the Mom-and-Pop businesses that made them what they are. eBay’s success was built upon providing a marketplace for small sellers, and eBay has all but abandoned such sellers.

At making a profit, Mr. Donahoe has been very successful. In the past five years, eBay’s stock price has risen more than five-fold ($10/share when Whitman left in 2008 to $52/share on Aug. 1, 2013). Five years ago, eBay’s listing composition was 70 percent auctions and 30 percent fixed-price items. Today, its listing composition is the reverse: 30 percent auctions and 70 percent fixed-price listings. At a Wall Street Journal “Executive Breakfast Series” earlier this year, Donahoe said that eBay will soon be 80 percent fixed-price and 20 percent auctions. Read More

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