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From: JakeStraw10/6/2008 8:02:48 AM
   of 7730
 
eBay Inc. Buys Leading Payments and Classifieds Businesses, Streamlines Existing Organization To Improve Growth
biz.yahoo.com 
Monday October 6, 7:45 am ET

SAN JOSE, Calif.--(BUSINESS WIRE)--eBay Inc. (NASDAQ:EBAY) today announced two acquisitions that significantly extend the company’s leadership position in online payments and classifieds. In payments, the company is acquiring the U.S.-based online payments business Bill Me Later® for approximately $820 million in cash and approximately $125 million in outstanding options. In classifieds, the company has acquired Denmark’s leading online classifieds site dba.dk and vehicles site bilbasen.dk for approximately $390 million in cash.

The company also announced plans to reduce its global workforce by approximately 10 percent, affecting about 1,000 employees in addition to several hundred temporary workers and the reduction of open positions. The global reduction is intended to simplify and streamline eBay’s organization, improve the company’s cost structure and strengthen the overall competitiveness of the company’s existing businesses. The reduction is expected to result in pretax restructuring charges of approximately $70 million to $80 million, with the charges predominantly recorded in the fourth quarter of 2008.

“We are making aggressive moves to strengthen our leadership positions in e-commerce and payments to competitively position our company for long-term growth,” said John Donahoe, eBay Inc.’s president and chief executive officer. “Bill Me Later is a perfect complement to our portfolio, a company that belongs with PayPal. Together, PayPal and Bill Me Later will make online payments safer, easier and more convenient than ever.”

“Our classifieds acquisition gives us another market leadership position in Europe for this rapidly growing part of our portfolio,” Donahoe said. “We are the global leader in classifieds with top positions in Canada, Australia, Germany, Japan and the United Kingdom, and sites in more than 1,000 cities across 20 countries. The acquisition of dba.dk and bilbasen.dk gives us technology and expertise we can leverage across our classifieds portfolio to create better customer experiences.”

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To: JakeStraw who wrote (7627)10/6/2008 12:29:16 PM
From: Doren
   of 7730
 
"Together, PayPal and Bill Me Later will make online payments safer, easier and more convenient than ever.”

One reason I buy on Amazon or half.com (owned and destroyed by ebay) is that payments are so easy. Credit cards. What's so hard about that? Auctions suck. I rarely participate.

Paypal is not horrible but they charge too much. Paypal is a good reason ebay is tanking.

It looks like Donahoe and eBay's whole strategy is to squeeze existing customers rather than innovate.

It's not going to work. Sooner or later viable alternatives will emerge. Amazon is continually innovating and taking away business from eBay.

Ebay can push only so far. The ONLY thing they have going for them is they were first. If I were a stockholder I wouldn't be. This company is doomed.

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From: Glenn Petersen10/12/2008 3:16:06 PM
2 Recommendations   of 7730
 
Amid the Gloom, an E-Commerce War

By BRAD STONE

October 12, 2008

WHEN the e-commerce giant eBay emerged from the last recession seven years ago with an aura of invincibility, its chief executive, Meg Whitman, boasted that “eBay is to some extent recession-proof.”

As the online auctioneer’s revenues and stock price kept climbing, one of its primary rivals, Amazon.com, just limped along.

How times have changed.

Ms. Whitman, now co-chair of Senator John McCain’s presidential campaign, retired from eBay earlier this year as the company struggled with stagnation. Amazon, meanwhile, has emerged as one of the most vibrant and reliable retailers in the country.

And in an unmistakable sign that Internet companies are indeed exposed to the gathering economic storm stemming from the credit crisis, Ms. Whitman’s successor, John J. Donahoe, laid off 10 percent of eBay’s 16,000 employees last Monday.

Mr. Donahoe noted that eBay was already feeling the effects of the downturn. “This looks like it is going to be a more typical economic cycle that impacts consumer spending,” he said. “We are not immune.”

That the economic crisis is washing up on Silicon Valley’s shores shouldn’t, perhaps, come as a surprise. Most tech companies are defenseless against waning advertising, business spending and consumer interest in big-ticket items like computers. Over the last three months, investors have punished tech companies like Google, Microsoft and Apple, extracting a fifth to a half of their market value.

E-commerce, though, was once thought to be a refuge from economic storms. People who stay away from the mall might actually be more tempted to shop online and hunt for deals, or so the thinking went.

But analysts are now revisiting that assumption. Many consumers, citing an uncertain economy, say they will clutch their wallets tightly this holiday season regardless of where they shop: 48 percent surveyed recently by eBillme, an online payment service, said they planned to delay purchases.

Traditional, brick-and-mortar stores had wrenching, double-digit declines in September sales and are bracing for a bleak holiday season. No one is certain to what degree online retailers will feel that same pain, because digital vendors have never endured a deep, protracted economic slump before.

“We still feel pretty good about this year, but I worry about next year and beyond,” said Brian J. Pitz, an analyst at Banc of America Securities. “Are people going to spend when they can’t get home equity lines of credit, a student loan or a car loan?”

For eBay and Amazon, the twin giants of e-commerce, the financial meltdown has arrived at a particularly crucial time. After years of claiming that their businesses were complementary, not competitive, the companies are now on a collision course.

Amazon has accelerated its courtship of small online vendors, allowing them to sell on its site — becoming more like eBay. And eBay, desperate to revive itself, has decided to emphasize traditional, fixed-price sales of both new and old merchandise — becoming more like Amazon.

AT stake is more than e-commerce bragging rights. On the Internet, size matters. Larger companies can collect more information about consumers, negotiate better deals with partners and use that leverage to expand their dominance (for example, Google versus Yahoo in search).

“This is a pivotal holiday season for eBay,” said Jeffrey Lindsay, a senior analyst at Bernstein Research who has covered the Internet for a decade. “What people fear is that Amazon is basically building a bigger sales base than eBay and will use that knowledge to sell people more and more of the things they want to buy online.”

Indeed, the balance of power in e-commerce seems to be shifting faster than anyone expected. Just three years ago, eBay had 30 percent more traffic than Amazon. Today, its total of 84.5 million active users is barely ahead of the 81 million active customer accounts that Amazon reported in June.

Amazon has exceeded eBay in other measures as well.

EBay’s market capitalization was three times Amazon’s in 2005, back when Wall Street loved the fact that it carried no inventory and generated huge profits. This year, eBay’s stock has lost over half its value and, in July, Amazon’s valuation surpassed eBay’s for the first time.

In a series of interviews, Mr. Donahoe acknowledged that eBay, based in San Jose, Calif., didn’t adapt fast enough to shifting e-commerce winds. He now embraces a “turnaround mind-set” and is refocusing its Web marketplace toward shoppers who don’t want to waste time in online auctions.

“There are times when I wish we can close this store and just open a new store, but we can’t,” he said. “We need to make bolder, more aggressive changes to the eBay ecosystem even if they are unpopular.”

Up in Seattle, meanwhile, Amazon’s chief executive, Jeffrey P. Bezos, says that after years of failed experimentation, third-party vendors — the foundation on which eBay was built — now account for about 29 percent of sales on Amazon. The company has endured and outlasted critics who long complained about its high fixed costs.

Last year, it impressed investors with accelerating growth, and its stock price revisited the highs of the dot-com boom, before waning euphoria and market pessimism erased more than half of those gains this year. Mr. Bezos credits Amazon’s tolerance for risky, expensive bets like the Kindle electronic reading device.

“Our willingness to be misunderstood, our long-term orientation and our willingness to repeatedly fail are the three parts of our culture that make doing this kind of thing possible,” he said.

EBay’s recent problems have made Mr. Bezos and his team look like shrewd and patient stewards of the Amazon franchise. And Amazon’s second wind is making eBay look as if it has missed one of the greatest opportunities in the Internet’s short history.

“EBay could have closed the door to Amazon back when Amazon was mostly just a platform to sell books and music,” said Scott Devitt, an analyst at Stifel, Nicolaus & Company, the investment bank. “But what eBay did in those days was to take a very hands-off approach and let the marketplace control itself. And that ended up being the downfall of the business relative to others that have succeeded.”

OVER the summer of 2004, at the annual executive retreat that eBay insiders call “Telluride,” a product strategy team argued that eBay needed to break into the promising world of digital media. Pointing to the popularity of services like Napster and the new iTunes music store from Apple, the group predicted that media like books, music and movies would inevitably be distributed digitally, over the Web.

EBay, they argued, needed to ride that wave.

That insight — which did catch on at Amazon and is now responsible for high-profile efforts like the Kindle and Amazon’s MP3 store and video-on-demand service — went nowhere at eBay.

“Nobody really shut it down. The process shut it down,” says a former eBay executive who was on the product strategy team but requested anonymity to avoid alienating former colleagues. “The company was obsessed with making quarterly numbers.”

Whether passing on digital media was a mistake at eBay is still an open question. But the anecdote illustrates larger problems. More than a dozen current and former eBay executives, from all levels of management, say eBay routinely failed to reorient its core business.

They say eBay avoided fiddling with its auction model because it was wary of disrupting a long-profitable equilibrium between buyers and sellers.

EBay has known for years that some Web buyers were looking for a different experience. Surveys suggested that auction participants were alienated by untrustworthy sellers and hidden shipping fees, and increasingly preferred the certainty of instantly buying items at a fixed price.

Although eBay executives recognized and routinely acknowledged the problem, they never took bold, direct steps to address it.

In 2005, the company acquired Shopping.com, a comparative shopping site that catalogs products for sale elsewhere on the Web. But for years eBay did not promote the company’s listings, primarily because its vocal community of sellers — the ones paying fees to eBay — protested whenever eBay sent buyers to other retailers.

Josh Koppelman, who founded the e-commerce site Half.com and sold it to eBay in 2001, says that there was an understandable cultural reluctance inside eBay to alienate sellers. “We got paid a fee to provide a service to a community,” he said. “Hurting members of that community was difficult.”

Instead of imposing critical fixes to its slowing model, eBay searched for high-growth businesses elsewhere, acquiring Skype, the online calling service; StubHub, the ticketing site; and a series of classified-advertising Web sites.

The company did create a whole new site, called eBay Express, where it tried to satisfy buyer interest in a simpler shopping experience. EBay Express automatically amassed all the fixed-price, non-auction listings on eBay properties and presented them in an organized way with only one payment system, PayPal — also owned by eBay.

But in the two-year life of eBay Express, eBay never directed any meaningful traffic to it, fearing that it would interfere with the more profitable and popular auction-oriented site. The company shuttered eBay Express this year and has said it will move some of its innovative features to eBay.com.

Contributing to intransigence, according to several former executives, were deep divisions and constant hand-wringing among its managers over the most fundamental question: What is eBay?

One camp believed that eBay was a discount palace and that it had to continually offer deals to buyers in whatever shopping format they wanted.

But another group, resistant to change even as late as last year when eBay was clearly losing ground, believed that the brand was tied up in the excitement of auctions. Emphasizing traditional shopping destroyed what made eBay special, they argued.

“Today online shopping is mainstream, but it’s also becoming boring,” Bill Cobb, then the president of eBay North America, wrote in a June 2007 blog entry that typified this thinking. “We’re investing in the quintessential eBay experience of buying and selling — person to person — in an auction format.”

Ms. Whitman seemed to moderate this constant debate while never actually settling it. At times, she also seemed unwilling to leave auctions behind.

In an interview last week, while on a break from traveling with the Republican vice-presidential candidate Sarah Palin, Ms. Whitman said it was hard for her to reflect on these kinds of divisions within the company, or on missed opportunities.

“There was no shortage of realistic looks in the mirror, where we asked ourselves if we were doing the best job that we could do,” she said.

She also addressed another notion raised by former eBayers, who say executives were dismissive of Amazon but focused obsessively on Google, the search leader whose tentative moves into e-commerce were viewed inside eBay as acts of aggression.

“Google is a disruptive competitor. It’s not a marketplace and it’s not a retailer but has a different way of marrying buyers and sellers,” she said. “I don’t think you can overstate any competitive threats.”

But paranoia about Google, these former executives say, fueled strategic missteps like the Skype acquisition, which Google had also pursued. Ms. Whitman and other eBay managers spent considerable energy trying to integrate Skype, and last year eBay wrote down $1.4 billion of the $3.1 billion acquisition.

As eBay obsessed about Google, the online retailer from Seattle was encroaching on its turf.

CONVERSATIONS with Jeff Bezos of Amazon inevitably provoke two kinds of outbursts. One is that famous, barking laugh that punctuates even seemingly mundane sentences. The other is his paean to the wisdom of long-term thinking.

“We are willing to plant seeds that take five to seven years to grow into reasonable things,” he said in an interview. “You can’t do big, clean-sheet invention unless you are willing to invest for long periods of time.”

Mr. Bezos has delivered these kinds of odes to patience and risk tolerance for nearly a decade. The company’s appetite for enduring short-term pain for long-term gain is clearest when comparing it with its rival, eBay.

While eBay was buying into classified advertising, online payments and Internet telephony, Amazon spent hundreds of millions of dollars building its brand as a trusted retailer — hiring customer service representatives and returning money to customers when transactions went awry.

As eBay took a pass on digital media, Amazon dove in and frustrated investors for years with margins that were diminished by a bulky R.& D. budget — but produced promising businesses like the MP3 store.

Compensation at the two companies also reflects core differences. Amazon evaluates its executives annually and gives performance-based stock grants. Until this year, when Mr. Donahoe became chief executive, eBay gave cash and stock bonuses based on quarterly performance, rewarding managers for meeting Wall Street’s short-term expectations.

Similarly, Amazon’s push to recruit the small sellers who orbited eBay was marked, at first, by patience and often-embarrassing experimentation.

In 1999, five years after Mr. Bezos first plunged his stake into the ground as an online bookseller, Amazon invaded eBay’s territory, introducing Amazon Auctions and a way for retailers to set up stores on the site, called zShops. The efforts tanked.

The problem then “was that nobody came,” Mr. Bezos said. “Actually, sellers came, but the customers didn’t care and didn’t shop there.”

Amazon tried to promote this siloed merchandise on its site by linking to it on its more popular product pages. These so-called “smart links” were hotly controversial inside Amazon and became the subject of a rivalry between its retail and technology groups.

Fearful that sending visitors to other pages would cut into their sales, retailing executives at Amazon took to removing them from the page at every opportunity, according to one senior Amazon executive who was there at the time.

SEVERAL years ago, the company introduced Amazon Marketplace, laying the groundwork for its current path by listing new and used items from third-party sellers alongside its own merchandise.

If Amazon didn’t stock a particular item, or if independent sellers could offer better prices, they would become the featured retailer on the page.

Amazon settled internal tensions by giving its retail managers credit for any products sold on their pages, even by third-party sellers. But Mr. Bezos says the arrangement still produces anxiety.

“Put yourself in place of our retail buyers,” he said. “You just purchased 10,000 units of a particular digital camera and you are told, if any third party anywhere in the world can offer a better price, we are going to give them the buy box and you are going to get stuck with the inventory. That causes some angst.”

Over the last five years, Amazon has lowered hurdles for independent vendors to sell on its site and recruited new groups of merchants as it has expanded into other countries and product categories — automotive parts in 2006 and office supplies this year, for example.

Amazon executives say they don’t specifically pursue top eBay sellers, but some merchants suggest otherwise.

David Duong, founder of Shoe Metro, a Web retailer based in San Diego, says Amazon representatives called him shortly after Amazon.com introduced a shoe category in 2005 and asked him to begin selling on the site.

“I guess they found us on eBay,” he said. “We were actually going to talk to them, but they beat us to the punch.”

Lately, small merchants and their trade organizations say, the outreach has become even more direct. The Professional EBay Sellers Alliance said that Amazon recently offered to waive some fees for the 800 members of the group, an organization of eBay power sellers, to woo them to its platform.

Because Amazon also sells many of the same products as its merchants, executives at eBay predict that competitive tensions will emerge as the Amazon Marketplace grows. Maybe so. It’s happened before.

Amazon once ran the Web operations of large traditional retailers like Borders, Circuit City and Toys “R” Us. One by one, those retailers concluded that outsourcing such a crucial feature of 21st-century retailing to a competitor was a bad idea.

But some of its newer deals with sellers indicate that Amazon is finding ways around those tensions, at least with small merchants.

Andrew and Deb Mowery of Fort Collins, Colo., who started selling home, garden and pet supplies on eBay in 1999, now make 60 percent of their sales on Amazon and about 20 percent on eBay. In addition to listing items for sale on the Amazon Marketplace, they are also a wholesale supplier to Amazon, providing it with products like heated pet beds.

Mr. Mowery is essentially competing with himself, but the arrangement works. “If they run out, I’ve got their back,” he said. “If I run out, they’ve got my back.”

Amazon wants to forge these kinds of close ties with other small sellers. A program called Fulfillment by Amazon, introduced in 2006, allows retailers to store their inventory in Amazon’s warehouses. When someone buys an item from that seller, Amazon ships it out of its warehouse in an Amazon box.

Integrating small merchants into its operations also allows Amazon to learn more about whom it can trust to sell on its site. Compared with eBay, the company says it exerts a far greater measure of control over its marketplace, calling certain vendors “featured sellers” and vetting others in product categories that are sensitive to fraud.

“At the end of the day, we believe it’s good for all of our sellers to make sure we are protecting the consumer experience first,” Mr. Bezos said. “Our first and foremost goal is to earn trust with consumers. If there are no consumers buying, nothing else matters.”

DESPITE Amazon’s success in courting independent sellers, its selection is still just a fraction of what eBay offers, and in some cases its prices are higher.

For example, there are hundreds of new, used and refurbished Trek racing bikes on eBay; as of last week, Amazon had three for sale. Acquisitive parents can buy a $90 Deux Par Deux baby sweater dress on eBay for under $30. But only a few of this French designer’s items are listed on Amazon, and for close to full price.

And that Lehman Brothers 150th-anniversary collectible tote bag, which every irony-obsessed stock market fan wants under the Christmas tree? It is available for purchase only on eBay, in auctions.

This is where Mr. Donahoe talks about a vision to fix eBay, and to create a Web discount store that offers a wide variety of new and old merchandise in auction and fixed-price formats. To get there, he must administer the sweeping, painful fixes that eBay has previously shunned.

“It was increasingly clear to me in 2007 that what felt like bold changes, and to the community felt like bold changes, were not bold enough,” he said.

His attempted fixes have started internally. In addition to making executive bonuses annual instead of quarterly, to keep employees from leaving and reward longer-term thinking, he moved the company’s focus to buyers instead of sellers.

He canceled the annual eBay Live conference next year with merchants — this year, it turned into an unwieldy complaint session — and began making eBay executives read weekly surveys that ask shoppers whether they would recommend eBay to a friend.

THE eBay facade is also undergoing its most significant renovation in its 14-year history as Mr. Donahoe tries to adjust eBay fees to tempt sellers to list more of their products at fixed prices.

EBay has also added a new 30-day listing at a fixed price that is more economical to many sellers than auctions. It has also disabled the feedback mechanism that allowed sellers to rank buyers and introduced a new “best match” search engine that promotes trusted sellers and good deals.

In another controversial change, eBay has struck special deals with large merchants like Buy.com, which pays no listing fees and offers more than half a million products on eBay.com.

The point of the arrangement is to ensure that eBay stays fully stocked in basics like batteries and printer cartridges. Other eBay sellers are enraged, though, arguing that the deal violates the sacred eBay tenet of the “level playing field.”

These sellers have vented their frustrations online about eBay’s changes. It’s hard to gauge whether the vitriol represents the majority view, but some less vocal, larger sellers on eBay say they have actually benefited.

“EBay has told all bad sellers to shape up,” said Jordan Insley, an electronics merchant who lives near Seattle. “I’ve seen a lot of sellers that used to sell a lot of product fall off the charts.”

Although he worries that buyer traffic on eBay is slowing, Mr. Insley says he will sell $13 million in gadgets this year on eBay alone. “I think eBay is moving in the right direction. We are sticking around.”

Still, Mr. Donahoe can’t count on that sentiment to carry the day. Few of his changes are expected to deliver any immediate results, other than alienating certain sellers.

Yet for eBay, the changes may be a matter of survival. The company need only look across Silicon Valley at Yahoo to see what can happen to wounded Internet companies with depressed stock prices.

In the meantime, he faces tough choices. He is weighing a possible sale of Skype by next year, and analysts think he will almost certainly make that move, since the company now acknowledges that Skype has little synergy with eBay’s other businesses.

That would free eBay to focus on its core marketplace, on getting through the torrential economic downpour, and on combating a challenger that is making greater incursions every day.

“I respect Jeff Bezos a lot as a leader and Amazon and what they’ve done,” Mr. Donahoe said. “But it is still early days in this industry. E-commerce is 7 percent of retail. I don’t think anyone thinks it’s going to end there. We think there is plenty of room for both Amazon and eBay to be successful.”

Copyright 2008 The New York Times Company

nytimes.com 

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From: Urlman10/19/2008 7:17:31 PM
   of 7730
 
Prediction:

1st Donahoe get boot.

Next eBay gets sold to Yahoo

Paypal remains as separate publicly traded company (not part of Yahoo).

Who wins? BOTH Investors and the eBay community.

Who Loses? Donahoe

Isn't speculation fun????????

Url

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From: Glenn Petersen11/25/2008 4:21:16 PM
1 Recommendation   of 7730
 
Some chilling statistics for eBay:

eBay Traffic Plummeting (EBAY)

Henry Blodget | November 25, 2008 12:10 PM

eBay's (EBAY) core business continues to fall apart. Some of the decline is likely the result of the declining economy. The rest of it is likely the result of the trends that have been clobbering eBay for the past two years: competition, overpricing, and the deterioration of eBay's value proposition. eBay's efforts to turn around this business do not appear to be working.

Check out the year-over-year decline in U.S. unique users to eBay.com, per Nielsen data below (year-over-year declines in lower right corner). Note the acceleration in declines since the summer.



alleyinsider.com 

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To: Glenn Petersen who wrote (7631)1/18/2009 5:46:24 PM
From: Thomas A Watson
   of 7730
 
Glenn, the deterioration of ebay numbers is also caused by the fact that ebay sellers all despise ebay more and more every day. As of few days ago it became forbidden to put in one's listing one would accept checks or money orders. And if you do and ebay finds it, they remove the listing. This will eliminate some number of folks from using ebay. 2% currenly pay with money orders from my almost 1000 sales.

But the con game of detailed seller ratings(DSR) which are a way to dupe buyers into creating data to ebay can deny promised discounts off the 11% final values on sale price is really dirtbag.

I am a power seller and this is my tracking of DSRs given me.
ebay.homeip.net  I created a DSR spread sheet and html file to compute DSR ratings as buyers withhold stars.
ebay.homeip.net 

DSR are obscene, an anonymous rating system where someone for no reason ever given the seller withholds stars whose average is used to give priority to where and if one's listing will show up in searches and also for ebay to deny the promised 40% discounts on final value fees. That for me was 200 bucks for the month of December. It is also used to revoke an ebay member listing privileges thus preventing them from selling at all.

Truth being stranger then fiction. In November while I had about 25 listings in my store all that had free USPS priority shipping in the price, my listing privilege was suspended as my DSR for Shipping and handling costs fell below the suspension threshold. The other day a buyer gave my 3 out of 5 stars for shipping and handling costs for and item that had free priority mail shipping in the price.

Now that is abject stupidity running ebay.

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To: Thomas A Watson who wrote (7632)1/21/2009 5:20:38 PM
From: Glenn Petersen
1 Recommendation   of 7730
 
Tom,

Thanks for the insight into eBay's relations with its "partners." Unfortunately, the company's management has taken one of the premier brands on the Internet and degraded its value.

In the meantime, Amazon continues to hit on all cylinders:

Amazon Prime Squeezes Already Struggling Rivals

Written by Matt Pace -- January 20th, 2009

While the 2008 holiday shopping season brought considerable anguish to the retailing industry, Amazon.com was the standout exception. As rivals lick their wounds and look ahead to a challenging 2009, the retailing giant offered them a measure of salt recently by reporting the holidays were actually its “best ever.”

After posting huge losses throughout its formative years, Amazon long ago quieted cynics who predicted it would never earn a nickel. Like its namesake river, Amazon continues its steady assault on everything in its path. In December, Amazon was once again the top online retailer…by a mile (excluding auction site eBay). Amazon’s December traffic surged 20% year-over-year, outpacing Target.com and Walmart.com’s respective 16% and 15% growth. In contrast, eBay’s December traffic (~80 million unique visitors) remained flat for the third consecutive year.



Amazon’s outstanding performance in December is even more evident when compared with ten rival discount retailers and department stores. Amazon’s share of visits across all of these sites jumped to 39% in December, up 18% from the previous year. This growth came at the expense of nearly every rival, although bankrupt Circuit City and struggling Overstock.com showed considerable weakness, down 44% and 35% respectively. Amazon’s gains were a result of not only attracting more consumers to its site, but also getting them to come back more often. Amazon visitors logged an average of 4.5 visits to the site throughout the month of December. Compare that to the average rival retailer that registered just 2.1 visits per shopper.



There are many keys to Amazon’s growing online dominance, including its zealous devotion to customer service and its masterful use of consumers’ browsing and purchase data to tailor the site for each visitor. This past holiday season, however, Amazon’s success was due in part to its aggressive promotion of the Amazon Prime membership program. For $79 a year, Prime entitles members to free two-day shipping on most orders with no minimum purchase required.



Growing the program was clearly one of Amazon’s key marketing objectives during the holidays. Shoppers responded to its free 1-month no-obligation trial offer by signing up in droves: enrollment averaged 3.4% of purchasers throughout the holiday season. The trial offer particularly resonated with last-minute shoppers. During the peak shopping week that ended December 13th, 4.8% of purchasers on Amazon signed up for Prime.

Amazon seems to have designed Prime with two goals in mind: increase customer loyalty (why would members shop anywhere else?), and to a lesser extent, increase impulse buying.

What impact on members’ shopping habits does Prime have? Does it drive heightened Amazon loyalty? Consider the following observations of Prime member shopping patterns in December:

-- 49% of the time Prime members shopped online, Amazon was at least one of the retailers they visited (compared with 29% for non-members)

-- 40% of the time Prime members shopped online, Amazon was the first retailer they visited (compared with 24% for non-members)

-- 53% of total online retail purchases made by Prime members in December were made at Amazon.com (vs. 29% for non-members)

It’s clear that even when members don’t buy a product on Amazon, membership in the program increases the likelihood they at least consider Amazon for the purchase. Undoubtedly, a large number of consumers who recently signed up for the program will cancel their membership before the trial ends. Yet many, now accustomed to the convenience of the service, will gladly part with the membership fee to avoid downgrading to regular shipping rates and delivery schedules.

As state governments across the country circle Amazon’s growing war chest like starved vultures, retailers of all sizes would be wise to consider the impact on their business of a growing Amazon Prime membership base. I would not be surprised to see rivals experiment this year with similar programs in hopes of countering Amazon’s growing clout. As pressure mounts on retailers, developing strategies to counter Amazon’s new “ace in the hole” will be key to their ability to continue to attract, engage and retain the best online shoppers.

blog.compete.com 

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To: Glenn Petersen who wrote (7631)1/22/2009 4:23:36 PM
From: Doren
   of 7730
 
Some of the decline is likely the result of the declining economy. NONSENSE - The economy should be HELPING ebay.

It's due to screwing it's customers and associates. It claims fixed pricing is killing it. NOPE. Half.com, once the king of used music and books, has been decimated due to mismanagement.

Meg started this. It's been a long time coming.

Message #7632 from Thomas A Watson at 1/18/2009 5:46:24 PM
Glenn, the deterioration of ebay numbers is also caused by the fact that ebay sellers all despise ebay more and more every day.

Totally agree but it's also buyers who hate them. Hate and despise are not strong enough words for ebay management.

They HAVE made one very large improvement in bidding but they are so INCOMPETENT that it's hard for even intelligent people to understand what they did.

Message #7633 from Glenn Petersen at 1/21/2009 5:20:38 PM
In the meantime, Amazon continues to hit on all cylinders:

NOPE. Sorry to say Amazon has new management in the IS department. In the past few months they've made some incredibly bone headed decisions. So far the results have not shown themselves but it only a matter of time like it was with ebay.

- They've hired arrogant Web 2.0 coders and recoded the site so now it runs like molasses on a cold day. If you doubt their arrogance download the code from a page and look at the last comment in the file. I downloaded a page of code and pasted it into a word file... it was 250 pages of 12pt for ONE page of web code. Crashes or locks up my Firefox browser with circular code all the time. There is no appreciable advantages to the code change to sellers or buyers.

- They've switched to Flash 9 for music previews... for no apparent reason except it's "the latest." I, and many others, cannot install Flash 9 at this time due to incompatibility. This effectively prevents 10% of their clients from previewing music. THIS IS PROGRESS? Duh.

- All feedback 1 - 4 is now counted as negative. Only feedback with a 5 is counted as positive. I've gotten ROSY feedback from clients with a 4 rating counted as negative. Great just make all your good sellers look bad for no reason.

- Here is the main reason you should be wary. The lower echelon people are playing the "See No Evil" game. In other words complaints are handled with "that's not happening" replies. They claim the new feedback rules have made no change. This means that management is not willing to listen at all. In fact employees IMHO are afraid to report anything negative to management. How stupid can you get?

There are more problems. Suffice it to say, the management change is not working well.

Sigh. Same with Google!

CRAIGS is working well.

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From: JakeStraw1/27/2009 10:34:07 AM
   of 7730
 
Is Skype for sale?

Experts say that Skype is a bright spot in eBay's portfolio, and it will take a hefty offer for the company to sell.
Tue, Jan 27 04:00:00 PST 2009
ct.cnet.com 

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To: Doren who wrote (7634)2/16/2009 11:02:41 AM
From: Thomas A Watson
   of 7730
 
I have continued tracking my feedback and mystical Donahoe Seller ratings. And now I have captured proof positive that ebay programmers cannot even code simple math. In the four Donahoe Seller ratings for the last 30 days I have no stars missing in three of 4 categories, yet in Item As Described I have been given 4.99 and not 5. duuhhhhhh... LOL..
Loss of stars calculations ebay.homeip.net  and ebay.homeip.net  my feedback tracking.
I have also been looking to buy some stuff on ebay and have not found a power seller who qualifies for any FVF credit. I am the only power seller I know currently getting any discount.

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