Wednesday, February 10, 2010, 8:52AM ET - U.S. Markets open in 38 mins..
From Silicon Alley Insider, July 16, 2008:
eBay's Q2 was in line with expectations, but Q3 guidance is weak, and will disappoint; shares are down 6% after hours. Sales increased 20% year-over-year, and net income jumped 22%, aided by share buybacks.
More important: Growth in eBay's "Marketplaces" division -- its core auctions/sales business -- is grinding to a halt. Transaction revenues grew just 9% year-over-year, vs. 14% y/y growth last quarter and 23% y/y growth during Q2 2007. PayPal and Skype are doing fine.
We'll listen in to the earnings call at 5 p.m. Eastern looking for more color, as well as any news about its odd legal fight with Craigslist.
Key Metrics:
Revenue: $2.19 billion vs. $2.17 billion consensus, up 20% y/y
EPS: $0.43 vs. $0.41 consensus
Operating Income: $545 million, up 19% y/y
Q3 Revenue Guidance: $2.1-$2.15 billion, short of $2.18 billion consensus
Q3 EPS guidance: $0.39-$0.41, low end of $0.41 consensus
Full-Year Revenue Guidance: $8.8-$9.05 billion vs. $9.01 billion consensus, up from prior guidance of $8.7-$9 billion
Full-Year EPS Guidance: $1.72-$1.77, in line with $1.74 consensus, up from prior guidance of $1.70-$1.75.
Notes from conference call:
5:00: Call starts -- standard disclaimers
5:05: CEO John Donahoe: delivered strong financial results. In our marketplaces business we feel good about overall results. Marketplaces revenue grew 13%. We're seeing encouraging signs from the changes we're making.
5:06: Our marketing services businesses also performed well led by strong momentum in classified and advertising.
5:06: PayPal revenue was up 33%. Increasing ubiquity of PayPal online. We're only beginning to tap the potential.
5:07: Skype had its 6th consecutive quarter of positive growth.
5:08: Priorities for 2008: make Ebay easier and safer, weave auctions and buy it now together, continue PayPal's dominance in online payments both on and off eBay.
5:10: New listings grew 19% in Q2. Selection on eBay is unmatched and it's getting stronger. We're seeing early results in our efforts to improve trust and safety. Sellers, both large and small, are making customer satisfaction a competitive advantage on eBay.
5:10: The number of power sellers with Detailed Sales Ratings of 4.8 or above (out of 5) has doubled.
5:12: Everytime you make a change someone's going to be mad. There are two areas where we've recently modified our plans -- last week we made changes in feedback, and we backed off our plan to make PayPal the only payment system in Australia.
5:14: PayPal has great growth prospects. PayPal and eBay greatly benefit from each other. Global penetration increased 5% y/y to almost 57% worldwide.
5:15: Seeing dramatic growth in the merchant services side. JetBlue, Blockbuster, and others have started offering PayPal this quarter.
5:16: Skype: revenues grew 51%, on track to pass $500 million in revenues with double-digit profit margin. Free peer-to-peer video is now used in 25% of Skype calls.
5:17: Rajiv Dutta is retiring from head of global marketplaces. He was previously CFO. Lori Norrington is replacing him, she was former CEO of Shopping.com.
5:20: CFO Bob Swan: Size of our business has increased more than 50% in the past two years. We've begun to capitalize on new opportunities like classified and advertising. PayPal transactions are now 26% of revenue. Marketing Services is 11% and Skype is 6%.
5:22: Repurchased 566 million eBay shares in Q2.
5:23: Operating Margin came in lower because of focus on lower margin businesses -- PayPal and Skype.
5:24: CapEx 6% of revenue for the past four quarters.
5:24: Return on investment capital was 28%
5:25: Growth in marketing services was fueled by advertising deals and classified businesses. Marketplaces growth was negatively impacted by 3% because of Power Seller discounts, among other things.
5:26: International GMV grew by 4% over last year, excluding foreign exchange.
5:26: One of our key inititaves is to increase selction on the sites. We reduced upfront fees. the pricing changes have had their desired effect on selection. With selection increasing fairly dramatically, we expereinced an expected decline in conversion rates. Sold items growth was 10% of the quarter, a 1% decrease from last quarter. This is largely because Korea and Australia. Average selling price declined by 6% from last year, because of the slowing economy, a campaign in Germany that brought lower priced items onto the site, and a crackdown on fraud.
5:29: PayPal posted a strong quarter. total payment volume was $15 billion, a y/y increase of 35%. We believe the strong growth in PayPal, is a result of our efforts to increase ubiquity of PayPal, increased use both on and off eBay.
5:31: We remain focused on tremendous growth opportunities for PayPal.
5:32: Skype total revenue increase 51% over last year. 338 million total users.
5:33: Product development came in 40 basis points higher than last year. G and A came in 20 points lower than last year. $2.9 billion of the $3.4 billion of eBay's cash rests outside the U.S.
Q/A
have you seen ebay's UI? Why is it so ugly and so difficult to use compare to google, facebook, amazon (seller side)...i mean we are in Web 2.0 aren't we? that's for starters....then poor customer service...please eBay, we all know you make a lot of money every second, but you need to upgrade your user experience in order to reach your next level.
have you seen ebay's UI? Why is it so ugly and so difficult to use compare to google, facebook, amazon (seller side)...i mean we are in Web 2.0 aren't we? that's for starters....then poor customer service...please eBay, we all know you make a lot of money every second, but you need to upgrade your user experience in order to reach your next level.
Ebay CEO John Donahoe's implementation of new Feedback policies has alienated so many sellers with its Unfair One-Sided Pro Buyer approach that many sellers have permanently stopped selling on Ebay. Look for Next Quarter to show negative growth due to flight of sellers, especially those who sell unique items and collectibles that have ready markets outside Ebay.
Well.. let's see... Here's my life's experience in BIG BUSINESS a) start out as a fledgling business b) core group of customers (mom & pop shops) support you c) business grows to be HUGE thanks to them d) management gets cocky / ignores core group e) management seeks deals with other BIG BUSINESSes f) management kicks core group of loyal customers where it hurts g) business slows h) business stagnates i) business is sold or goes under GEEZE I should get a few million a crack to keep reminding these fools of how it works in the REAL WORLD.
the combination of higher seller fees and the new unfair to sellers feedback system make for a poor seller experience. Ebay needs to remeber that sellers are the ones that actually pay fees and monthly subscription fees regardless if they have revenues. Improving the buyer experience was a great idea but it didn't have to be an either or decision. OH YEAH....Don't forget the other bad move of reducing the exposure that the store listings now receive. My sales dropped immediatly once the search protocol changed
Its absurd to think ebay is doing well. ANY user can see his final price is shrinking weekly. Sure auctin listings are growing as a influx of cheap items compete for free listings. The real mony made by ebay is in the antiques which haave been steadily going down since their feedbak announcement. No seller, no buyers, less final value means less money for ebay. Mark my words there is a mass exodus of finer items being listed becasue the sellers are not getting what they use to get, and ebay has no one to blame but itself. Soon it will become aparent to everyone, as a use I see it already.
Through all the smoke aand mirrors. it is quite easy for any ebay user to see that. Final value is going down, less is being listed and less sales are being made at a lessor price. Its only a matter of time before ebay implodes. Yes paypal is doing quite well, but again as they rob us blind , you will see more and more, no paypal. It will catch up to them next quarter or the following one most certainly. What started as a graet American idea has been ruined by a great american idea.
eBay forgot that a lot of sellers were also buyers on eBay. By pissing off sellers, they ended up pissing buyers also. I have no idea why they thought sellers and buyers were two different groups. Auction pages on eBay look like a ghost town compared to what they used to be only a few quarters ago. Instead of Yahoo, Icahn should have bought eBay's shares and mounted a proxy fight to replace the board and the top management so that he could pick the company apart and sell off the pieces.
I use them now only to see what's available. Then I go to Amazon or my local shops to buy and sell. Some of their puffed-up founders forgot they were businessmen and now think of themselves as political leaders. Run, Meg, run, so we can show you what we think of you.
I buy and sell frequently on ebay. I think the changes to buyer and seller feedback are a great improvement. These changes help deter sellers who don't care about their buyers and it provides better competition overall. Ebay has also lowered some of the insertion fees. This was great news for many of us.
Talk about spinning a bad situation! Whoever made the comment about management sticking to business and not politicizing or imposing their version of morality (my words) is right on target. Sellers are now treated like lepers - although Ebay is more than willing to take their money in growing percentages. SELLERS pay the bills, increase revenues, and provide growth. Of course buyers should be protected, but so should sellers! I've never seen such a one-sided policy. Amazon, if you're listening, this is your opportunity!
Yes, eBay lowered their insertion fees, but this is only great news if the item doesn't sell. With the lowering of insertion fees came higher final value fees. So, the result is that if the item does sell the increased final value fees wipe out the lower insertion fee and adds some extra to the total cost of selling the item. The lower insertion fee was just a marketing ploy to get more stuff listed, which it appeared was successful. However, I must have missed the part about what percentage of those new listings actually sold and had a positive effect on the bottom line, because.. wait.... it's not there!
eBay has continually screwed the buyers and itself over the last 5 years... customer support went from pathetic to non-existent... they not only allowed fraudulent sellers to run rampant, but encouraged it (and still do, until they get caught), because it means more money in their pockets in fees... they say they're cracking down on fraud, protecting buyers, blah blah blah... it's a LIE... if you report a fraudulent seller, eBay does NOTHING... not until they get dragged into court by someone like Tiffany's or Louis Vuitton, do they even remotely try to stop the fraud... and then it's NOT for the "buyer's protection", it's to cover thier own hineys, so they don't get sued yet again for millions.... "providing the buyer a better experience", my fanny... if that were true they wouldn't have invited buy.com to pedal millions of cheap china items, readily available at walmart, where you don't have to pay shipping and deal with a middleman... the reason they invited buy.com was merely to put up a smoke screen for shareholders, so they could keep the appearance of item listing numbers up, when they drove sellers and buyers away in a mass exodus over the last few months... buy.com pays eBay NOTHING in listing fees and last I heard, they had 5 MILLION listings on eBay... interesting, in that, that's about the number of listings eBay LOST when all of the sellers closed up shop and moved to other venues... Any purchasing transaction on eBay means you are potentially risking another rip off from a fraudulent eBay seller and why would you want to pay shipping and handling for that? Of course eBay hasn't done anything to protect sellers from fraudulent eBay buyers either, who are now running rampant, filing claims with PayPal for every item they "purchase" by making various nefarious/bogus claims in regards to the item, causing charge backs for the eBay seller, as well as charge back fees, as well as losing the item (which eBay resells for pure profit), as well as time lost, as well as seller listing fees lost (up front costs and final value fees), as well as receiving a negative feedback remark from said fraudulent buyer with ZERO recourse, according to new eBay policy... and you buyers think this is good business? You think this benefits you? YOU, the honest BUYER will have to pay for these incredulous losses, one way or another... the cost must be passed on, just as eBay passes it's losses onto sellers in the form of fees... how do you feel about that great "buyer experience" now? I was an eBay seller for over 10 years... the better part of that a "powerseller" (the tern "powerseller" used to mean so much more than just listing numbers and eBay fees paid, it used to mean a certain standard was upheld by the seller, it used to be the mark of excellence, now it's the mark of money in eBay's pocket, absolutely nothing more)... I left eBay 9 months ago for the other shopping sites (blujay.com, ecrater.com, ebid.net, etsy.com), as well as TENS OF THOUSANDS of other honest sellers (sellers who worked hard for their excellent reputations and refuse to allow new, backwards ebay policy to ruin it), and will never go back... sadly, eBay will flop... there's just no stopping their downward death spiral now... they got way too caught up with themselves, while wallowing in the money and greed, to keep a handle on the site and now it's unfriendly to both buyer and seller... without honest sellers, there are no honest buyers and vice-versa... WELCOME TO THE COMPLETELY CORRUPT, JUNK MARKET of a DIRTY JOKE, CALLED EBAY and have a nice shopping experience!
Then there are those sellers (like myself) who want to leave, but have to stay due to the built in magnet. No eBay = No Income. I keep looking for other sites that can replace ebay, but for me and what I sell, they don't exist. I'm a powerseller 100% positive, all my feedback says stuff like "Best shipper on ebay, Very quick and professionally packaged", but I don't even qualify for a 5% discount because of the way they "clarify" what a star rating means. In fact, I have a "LOWERED" search status because of my shipping charges. This lowered status came AFTER I stopped charging a handling fee and even offered free shipping on about 20% of my items. What else can I do, give my stuff away? The end is near!
short the stock . it will be $8 next year
@ cent_calif, if people just start listing at other sites, the buyers *will* come, because they won't be able to find the rare and fun things that have previously been offered on ebay. Ebay wasn't built (by the sellers) overnight, it took years. However with the sellers leaving ebay in droves, the alternative sites are heavily on the rise. Prior to ebay's ridiculous policy changes, there was *never* a surge like we're seeing at the other selling venues. It *will* happen for the other sites, ebay is dying, quickly becoming a "has-been". Start listing on other sites and direct your buyers to them for "more" items. *Use* ebay to divert *your* traffic.
I was pleased to see the feedback changes. I am mostly a By=uyer, and I felt it was unreasonable that sellers waited for me to leave feedback before they would do so. In my opinion, the only issue a seller has is whether the buyer pays promptly. Once that is done, there should be positive feedback. If the buyer is unhappy with a purchase and the seller doesn't make it right, then the buyer must leave bad feedback, without fear of retribution. I had numerous bad experiences with sellers but I wouldn't leave bad feedback because they would flame me back. I even got a negative once for leaving a neutral! This change is 100% correct and they should not change back. Seller feedback must only take account of buyer payment and not be a way to get back at a buyer who leaves warranted negative feedback. So sellers, live with it. Do right by buyers without fear.
ric...@aol.com writes: Clearly the impact of policy changes and concept changed imposed by CEO J Donahoe are dragging the marketplace down the tubes. Since the implementation of Mr Donahoe's recent policy changes, buyers and sellers alike have lost all trust and confidence in eBay. Donahoe's stated claims of restoring trust and confidence have had the exact opposite effect. Mr Donahoe believes in trashing the script that helped build eBay into a billion dollar global marketplace. Clearly, the quarterly report released yesterday shows that buyers and sellers are not buying into Mr Donahoe's new eBay, and that the path that has been set for eBay's future is fatally flawed. As Donahoe and his team have alienated small sellers and chased many from the site, he ignored the fact that these are also among his highest volume buyers as well. Did he believe that when small sellers were pushed out by high fees, one way feedback, discriminated visibility in search, non existent customer service and the like, that these very same people would continue to support the marketplace as buyers? Under Donahoe's leadership, deals have been made with mega sellers like buy.com who have brought millions of listings to eBay despite the fact that numerous listing violations which result in padding of listing volume has taken place. eBay leadership ignores the violations in order to be able to claim their listing volume levels are solid. The quarterly report shows the addition of buy.com has succeeded only in replacing the listing volume lost by the exodus of thousands of small sellers, but has not increased buying activity or brought new buyers to the site. It is obvious that serious damage has been done to eBay in the very short time Mr Donahoe has been at the helm, and its quite possible that the damage is irreversible. Many sellers alienated by Mr Donahoe's policies have found other web sites to list their merchandise on. In every case fees are lower or non existent and are finding happy buyers outside of eBay in ever increasing numbers. For years now, eBay has provided ever worsening customer service. Customer service must be brought above the level of automated processes and off topic canned responses which do nothing to resolve issues, this means putting people, not computers to work evaluating complaints and claims through all stages. Buyers and sellers need to be able to contact real live people, not be relegated to one way communication via email with no process for follow up or review. Already, eBay is realizing their mistakes and are starting to pull back from some of their draconian policy changes, but the horses have left the barn, and all eBay has is Mr Donahoe and his team trying to close the doors. In order to survive long term, eBay needs a major shake up at the top. Current leadership needs to be removed and replaced with executives that are prepared to scrap recent policy changes, and restore trust and confidence which small sellers once had in the company. Without putting the brakes on the current efforts of the Donahoe team, eBay is destined to become the biggest Internet boom to bust story in history.
ric...writes: Clearly the impact of policy changes and concept changed imposed by CEO J Donahoe are dragging the marketplace down the tubes. Since the implementation of Mr Donahoe's recent policy changes, buyers and sellers alike have lost all trust and confidence in eBay. Donahoe's stated claims of restoring trust and confidence have had the exact opposite effect. Mr Donahoe believes in trashing the script that helped build eBay into a billion dollar global marketplace. Clearly, the quarterly report released yesterday shows that buyers and sellers are not buying into Mr Donahoe's new eBay, and that the path that has been set for eBay's future is fatally flawed. As Donahoe and his team have alienated small sellers and chased many from the site, he ignored the fact that these are also among his highest volume buyers as well. Did he believe that when small sellers were pushed out by high fees, one way feedback, discriminated visibility in search, non existent customer service and the like, that these very same people would continue to support the marketplace as buyers? Under Donahoe's leadership, deals have been made with mega sellers like buy.com who have brought millions of listings to eBay despite the fact that numerous listing violations which result in padding of listing volume has taken place. eBay leadership ignores the violations in order to be able to claim their listing volume levels are solid. The quarterly report shows the addition of buy.com has succeeded only in replacing the listing volume lost by the exodus of thousands of small sellers, but has not increased buying activity or brought new buyers to the site. It is obvious that serious damage has been done to eBay in the very short time Mr Donahoe has been at the helm, and its quite possible that the damage is irreversible. Many sellers alienated by Mr Donahoe's policies have found other web sites to list their merchandise on. In every case fees are lower or non existent and are finding happy buyers outside of eBay in ever increasing numbers. For years now, eBay has provided ever worsening customer service. Customer service must be brought above the level of automated processes and off topic canned responses which do nothing to resolve issues, this means putting people, not computers to work evaluating complaints and claims through all stages. Buyers and sellers need to be able to contact real live people, not be relegated to one way communication via email with no process for follow up or review. Already, eBay is realizing their mistakes and are starting to pull back from some of their draconian policy changes, but the horses have left the barn, and all eBay has is Mr Donahoe and his team trying to close the doors. In order to survive long term, eBay needs a major shake up at the top. Current leadership needs to be removed and replaced with executives that are prepared to scrap recent policy changes, and restore trust and confidence which small sellers once had in the company. Without putting the brakes on the current efforts of the Donahoe team, eBay is destined to become the biggest Internet boom to bust story in history.
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John - Wednesday July 16, 2008 05:59PM EDT
John Donahoe must be in the dark concerning the consequences of Ebays' recently implemented Feedback policy changes. The negative consequences to Sellers has contributed to the slowing growth of listings and has unquestionably resulted in many Sellers and Powersellers finding alternative internet marketing outlets, such as Amazon, that will enable them to grow profitably.