Friday, February 09, 2007

eBay Plans for Removal of Unproductive Items

eBay execs recently told Citigroup analyst, Mark Mahaney, that plans are in the works to increase average Revenue Per Listing (RPL) by removing unproductive listings, driving higher conversion rates, and increasing average selling price according to an article on Auctionbytes. This has led to wild speculation of the eBay discussion boards about the definition of "unproductive" and also about the definition of removal. To many sellers on the Stores discussion board, "unproductive" is defined as listings that do not generate significant revenue for eBay, despite the the fact that many of these items may be part of an individual seller's business plan.

The consensus among the few sellers that have learned about this possible policy all seem to agree that a major fee increase is in store for sellers this year. Many sellers were predicting a summer fee increase prior to this announcement, but now feel that the increase will be a very significant increase that will force sellers to price items very low and reap very low profit margins, just to ensure that items sell. It is not uncommon for eBay to raise fees during the summer to boost lagging revenue created by a seasonal dip in number of listings on the site.

Wednesday, February 07, 2007

Is an eBay & MySpace Partnership in the Works?

Early this morning Reuters released a story about a possible MySpace & eBay partnership. The article said that plans were in the works to allow MySpace users to post items for sale on their MySpace pages, items that would also show up on eBay.com. Neither company's officials were available for comment.
Can you say "Can of Worms?" (before you answer, maybe you might want to buy some eBay stock. this is the kind of thing that investors will see as nothing short of the second coming)
In theory, it sounds like a great idea. Get a younger (18-25 and even younger - ie. too young to enter into binding contracts) demographic involved with eBay, get eBay back in the fad-light again, and try to salvage something from all the traffic that is being lost to MySpace.
However...maybe I'm just cynical, but I see major issues with this possible deal. The success of any such deal may depend largely on who is responsible for the code. It's common knowledge that eBay "engineers" cumulatively fail badly when it comes to programming things that work properly (see new Markdown Manager). It has taken two years (or more) for eBay to get TL2 to the point it is working halfway decently, how long will it take to make it so a MySpace user interface can function appropriately?
Aside from possible technical glitches galore....in my mind there is a huge question of liability in the long run. A partnership such as this could put eBay in a position for more frequent and larger lawsuits. Fraud on eBay is rampant, despite whatever Bill Cobb vomits from his mouth in press conferences and speeches. MySpace is as bad or worse. (neither site is all bad, I'm not saying that). Add the current problems with fraud on eBay to MySpace problems and they could be looking at a major mess.
My prediction is that if this deal takes place, it will be received with a standing ovation from the financial community and little more than a grunt from the MySpace demographic. This seems like one more instance (like EE) where eBay is trying to be hip, and trying to accomplish that by duplicating services that are already offered - while putting themselves at risk. Hopefully the proposed "partnership" is just that, and won't require eBay to shell out a billion dollars for the privilege.
Finally, what message does this send to online predators that frequent sites like MySpace? Now they will be able to see a picture of the seller (and even possibly the seller's bottom...or more) and have access to all sorts of personal information about the seller that is really of no consequence to a retail transaction. I see a major loophole on the horizon for child predators too. "Officer, I was just picking up my latest eBay purchase...a Hello Kitty handbag with matching scrunchie!"

Monday, February 05, 2007

Wikipedia Passes eBay in Traffic...Blogger Moving in Fast

This past week eBay was passed in amount of web traffic per million by Wikipedia, which moved into the 12th spot on Alexa's traffic ranking. Making a run up the charts is Blogger which has moved up several places and now trails eBay by only two positions. This drop in ranking comes even as eBay is experiencing somewhat of a traffic surge per million in the past several days. Prior to the mini-surge, eBay traffic was at the lowest point per million since fall of 2001. Today Alexa is showing that Blogger is only one position behind ebay for the day (Alexa's ranking is based on a three month average), and for the week's average, Blogger has actually surpassed eBay in traffic.
This news comes during the first week of a two week boycott that is being observed by more than a few eBay users who are unhappy with eBay's new SMI (hidden bidder) policy. eBay's Bidding community discussion board has seen a surge in postings to a thread about how much everyone (both buyers and sellers) hate the new policy. There has also been much talk within the eBay community about the effects that sites such as YouTube, SecondLife and MySpace will - and are having - on eBay traffic.
So the numbers beg the question...has the internet auction fad seen its height, or is the decreasing traffic on eBay the result of poor managerial decisions?