Thursday, December 24, 2009, 9:18PM ET - U.S. Markets closed early today.
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
Oh yeah and another thing, Ebay raised its rates so high on the final value (auction close percentage) that initially it would look like they are making more money by killing sellers with fee's and punishing them by buyers not giving them 5 stars on the shipping charges ... shipping charges have no business in customer feedback, that is completely ridiculas, everyone states their shipping charges before you even buy the item, if you don't like the shipping charges its this simple DONT BUY IT!!! ... Ebay knows damn well almost no one is going to give anyone 5 stars on shipping charges because everyone hates to pay shipping, so then Ebay removes any sellers discounts and lowers us in Ebay search if we get anything lower than 5 stars on everything or anything ... talk about total BS!
Stick a fork in it - IT's DONE! Pizz off your oldest most loyalest members - sellers who were also buyers! What's wrong with the flea market image?
I bought a car in 2006 through ebay. the car was garbage, the warranty a big lie, and the seller did not ship the car for a month. when we got it within a week the $6,000 car had $6,000 in repairs needed. ebay said their protection policy ended 30 days after the bid, so we were out of luck. last time i use ebay for any large transaction. nothing over $50. i also reported a number of copyright violations to ebay. they did nothing about them. ebay deserves to go oob.
Kevin, the feedback changes are not good for anyone, including buyers. Most sellers are also buyers with the exception of the huge mass merchandising powersellers who are only there to flood ebay with multiple listings of their cheap junk from china and taiwan that you can buy in most dollar stores or at walmart. Yes, there were a few sellers who retaliated with negative feedback but the majority of sellers are honest dealers who want to sell quality stuff and try to make their customers happy in order to get return business. Taking away the seller's ability to leave honest feedback about a buyer who may have been slow in paying or otherwise been a PITA made the entire feedback system pointless. Leaving only positive feedback for buyers degrades the value of a buyer's fb standing to silch since it is completely unreliable, so in protest, many sellers now refuse to give feedback at all. So this hurts a buyer, especially one with low amount of transactions, because if he doesn't get any feedback his feedback score will remain stagnant, reducing seller confidence in willing to deal with him. As far as the lower insertion (listing) fees go, that was greatly offset by the higher final value fees which makes it even harder now than before to get a decent profit if any at all. Take into account the fact that basically you are being triple charged for everything you sell on ebay (listing fee, FVF and PayPal fees) and you're lucky to make anything at all. You're better off putting in a $5 yardsale add in the paper and then sale your stuff to people in your neighborhood, at least you only spent $5 total and whatever you make from your yardsale you get to keep.
Yeah great idea Donahoe get buy.com on there just to show that your listings numbers are still good, but buy.com pays no listing fee's ... this guy is such a joke, no wonder so many executives are leaving, no one wants to be there when the ship sinks and then tell their next employer that yes you were there while Ebay died and we killed it ... this will all catch up with Donahoe and I hope to hell he feels the pain of all the people that sold on Ebay because they were disabled, stay at home moms and small business people doing it honestly just to make a small living, this guy just doesnt get the fact that Ebay is an electronic flea market of sorts and thats why people came to the site to begin with ... he instead wants to fill it with the same stuff every other site is sellling like Amazon, BUY.com Overstock and a million others ... you just cannot get the quirky quality of goods from no other place than "individuals" ... Ebay mid as well close down any auctions by "individuals" and buy their own stuff to sell because this moron Donahoe just has no clue what he is doin ..., its actually quite embarrassing that a guy thats been there that long has no clue what kind of site he even is running, someone with some auction experience needs to be in there or better yet get about 1,000 of its actual small sellers $1,000 to $10,000 a month and let them make the decisions based on board style votes, Ebay was at its best when it was an AUCTION SITE, now they are trying to be just like every other site out there, why in the hell when you have almost 100% market share of Auction sites do you then start wanting people to do Fixed Price and Buy it Nows, this guy took what Ebay was best at and threw all the Auctions to the dogs ... I wish they would get a whole new crew over there because I assure you Donahoe isnt the only moron running in circles chasing his tail in the Ebay board room ... I on the behalf of other small sellers would just like to say I hope what you have done to us comes back ten fold on you sir.
Sadly, people forget all of this crud happening at ebay began with Meg Whitman (aka: "margaret nitwhit")... not only was she the one to begin implementing the incredibly stupid changes at ebay, causing the beginning of the site's demise, but also the other changes that that idiot Donahoe conjured up in that pea brain of his, had to pass across NitWhit's desk for the stamp of approval prior to being implemented. She merely left Donahoe "holding the bag", her own personal scapegoat, so it would appear that her slate was clean when she bailed to pursue politics (typical politition). She (as well as several other ebay execs) dumped the max amount of stock allowed by an ebay executive in the 4th quarter last year, that should've been a BIG wake-up call to everyone. If nothing else why have they not been investigated for insider trading? They KNEW all of the changes were coming and they KNEW it was going to hit them hard. And this moron, NitWhit, wants to be Governor of California? SCARY!
People used to go to Ebay for a better price and a wide selection, of which the management is just killing ... Think, you raise listing fee's and lower people in search unless they pretty much offer free shipping, whats that do to the prices on Ebay? Well I will tell you you get less people listing, less selection, the sellers raising their prices to recoup the shipping costs, thus less traffic and less sales ... this is a common stupid practice, its just like an Economy of a country ... Raise the taxes of the manufacturing and business guess who pays? It gets passed to the consumer ... The management morons at Ebay should be paying us to list our items, they should not be taking a listing fee, then if you sell it again more fee's and they raise them all the time are they just plain stupid or what? ... all they ever say is its all about the buyers if you have no buyers then you have nothing, well I got news for you Ebay and you can mark my word on this, if you got cheap prices for the same goods, you wont worry about buyers, because they will come, people these days don't need to feel all warm and fuzzy about the person they are buying from ... the warm and fuzzy feeling these days comes when you SAVED A BUCK!!!! ... Their raising prices and pricing everyone off Ebay to stop selling there is just plain stupid! ... Bring back the favoritism to the auction format thats why everyone came in the first place oh yeah and a BETTER DEAL and a WIDE SELECTION!!! not like every other site on the internet.
As a seller I want the option to leave negative feedback on dead beat bidders. Now bidders think they are in charge and if they want to wait, 10, 15, 20, days to pay so what. All we can do is a non pay bid alert. Then they pay & all is forgiven. Thats not fair. And the feedback ranking stars are for the birds. Example: Buyer buys & pays on a sat night. Monday morning I send email, thanking the person, payment received, item mailed, feedback posted, any problems let me know.(short version) She leaves positive feedback but says" U need to work on communication". So she slams me with a bad communication rating. WHAT the hell. Did she want a kiss too!!!!!!!!!!!!!! I didnt deserve that. My point is this: Changes Ebay think we need or is better for us, is just hurting us. There will always be buyers but with out the sellers, the buyers will have nothing to buy. The buyers dont pay ebay, sellers do.
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Yahoo! Finance User - Thursday July 17, 2008 03:29PM EDT
So you think its right when buyers dont pay and we cannot leave them a negative feedback which happens many times a week too me? ... Here's the real kicker they can leave me a negative feedback and didn't even pay for the item talk about BS! ... what people don't seem to realize is Ebay is a community not a Amazon, you buy something from Amazon you pay and then you get to have the item, thus no reason to have a feedback system for a buyer because they all pay ... try selling on Ebay for a while and you will understand about some of the insane people that are buyers ... Ebay lost its way when they started screwing around with everything, I have purchased 100's of things off Ebay but before I buy I make sure these people are actually sellers and just dont have a bunch of feedback from buying 2 cent items to get 100% positive feedback and then list a bunch of stuff and screw everyone ... if people would just thouroughly look at who they are buying from 99% of the fraud would not exist ... you just don't click and buy on Ebay be smart and do a little research it pays off in the end.