Silicon Investor - eBay - Superb Internet Business Model

[zax] Shah Faisal Shah A $12 BILLION COMPANY JUST BID $56 BILLION FOR EBAY. Let t...

zax — 5/5/2026 9:47:44 AM

Shah Faisal Shah

A $12 BILLION COMPANY JUST BID $56 BILLION FOR EBAY.

Let that math sit for a second.

GameStop, a company worth $12 billion, has made a cash offer to acquire eBay at $125 per share. eBay is currently trading at $108. The total deal value is $56 billion. GameStop is trying to buy a company four times its own size.

eBay confirmed it received the offer. Its board will review it.

Then Ryan Cohen went on CNBC and said he has not even spoken to eBay's management yet. "We are just starting."

The market reacted exactly as you would expect. eBay opened up 6% as investors bought the stock hoping to sell at $125 when the deal closes. GameStop dropped 5% because nobody has explained where $56 billion comes from when the buyer is worth $12 billion.

Here is the question every serious investor is asking right now.

GameStop has approximately $4.6 billion in cash on its balance sheet after its recent equity raise. A $56 billion acquisition requires financing that does not currently exist. No bank has been named. No financing commitment has been disclosed. Cohen has not spoken to the target's management. The regulatory path has not been mapped.

This is either the most audacious corporate move in a generation, or it is a $12 billion company filing paperwork it cannot fund to move a stock it is sitting on.

eBay's board has every reason to listen politely and wait.

GameStop's shareholders have every reason to ask where the money is coming from.

Does Ryan Cohen actually have the financing, or is this the opening move in a much longer game?

[zax] eBay Inc. (EBAY) 109.33 +5.26 (+5.05%) GameStop Offers to Buy eBay for $56 Bil...

zax — 5/4/2026 4:23:30 PM

eBay Inc. (EBAY)
109.33 +5.26 (+5.05%)

GameStop Offers to Buy eBay for $56 Billion

GameStop has made an unsolicited $56 billion cash-and-stock offer to buy eBay (paywalled; alternative source), with CEO Ryan Cohen arguing he can turn the marketplace into a far larger Amazon competitor. "EBay should be worth -- and will be worth -- a lot more money," Cohen said in an interview. "I'm thinking about turning eBay into something worth hundreds of billions of dollars." The Wall Street Journal reports:

Cohen said GameStop has a commitment letter from TD Bank to provide up to $20 billion in debt financing to help make a deal possible. GameStop delivered an offer letter to eBay on Sunday and released a copy of it following the Journal's report on the details of the bid. Cohen wrote in the letter to eBay Chairman Paul Pressler that GameStop started building its eBay position on Feb. 4. It said its offer consists of 50% cash and 50% GameStop shares.

EBay said Monday morning its board and financial advisers would review GameStop's unsolicited proposal. It said there were no discussions with or outreach from GameStop before receiving the offer. Ebay added that it will review the offer "with a focus on the value to be delivered to eBay shareholders, including the value of the GameStop stock consideration and the ability of GameStop to deliver a binding, actionable proposal."

If eBay isn't receptive, Cohen said he was prepared to run a proxy fight and take the offer directly to its shareholders. The window for shareholders to nominate director candidates at eBay ahead of an annual meeting scheduled for this June has already closed, according to the company's proxy materials. Cohen told the Journal that putting his videogame retailer and eBay under one roof could create opportunities to cut costs and improve earnings. The two companies have some overlap already, including a focus on selling collectibles such as trading cards. "There is nobody who is more qualified, based on my experience, to run the eBay business," Cohen said, referencing his time at GameStop and previously Chewy, the online pet-products marketplace he co-founded.

slashdot.org

[Sr K] How did eBay get caught up into this? EBay to Pay $3 Million Penalty for Employ...

Sr K — 1/11/2024 4:23:02 PM

How did eBay get caught up into this?

EBay to Pay $3 Million Penalty for Employees Sending Live Cockroaches, Fetal Pig to Bloggers

Harassment campaign, involving a bloody pig mask and live insects, was in retaliation against critical coverage of the company

By
Joseph De Avila
Updated Jan. 11, 2024 3:19 pm ET

Share

Resize

Listen
(4 min)

The e-commerce giant was charged with two counts of stalking through interstate travel, among other charges. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
EBay agreed to pay a $3 million criminal penalty after employees engaged in a harassment campaign against two bloggers for their coverage of the company, including mailing them live cockroaches and a fetal pig.

The e-commerce giant was charged with two counts of stalking through interstate travel, two counts of stalking through electronic communications services, one count of witness tampering and one count of obstruction of justice.

Exc.

[Michael555] [deleted] - LinkFarming

Michael555 — 4/12/2022 12:09:59 PM

[Levyadisa123] I've always considered eBay to be one of the most promising e-commerce startups ...

Levyadisa123 — 9/24/2021 4:17:03 PM

I've always considered eBay to be one of the most promising e-commerce startups of our day. Now the business covers the whole world, and there is probably not a single person in the world who hasn't ordered from eBay at least once. Many people learn from the example of this store and use one-stop solution for setting up businesses. If you build a brilliant strategy for developing such a business, it can quickly achieve great results. As an example, we can take Aliexpress. If only a couple of tens of thousands of goods were initially ordered there, it's now the largest online store. It should be understood that you buy not only an item but also a service that makes the whole buying process as convenient and high-quality as possible on eBay.

[Nsleveror] Hi! My best friend started a business 1 year ago. He decided to start a business...

Nsleveror — 7/17/2021 9:08:12 AM

Hi! My best friend started a business 1 year ago. He decided to start a business with cars, being passionate about them. Thanks to this site newbondstreetpawnbrokers.com he started a business with both classic cars and more modern cars. Now he has a very profitable business, although his business is just starting from 1 year. He wants to sell some cars and decided to publish them on EBay. I am glad that he is happy and with a thriving business that brings him a good income. After his experience I decided to invest in cars.

[Glenn Petersen] EBay Nears Deal to Sell Classified-Ads Unit to Adevinta Deal could value eBay u...

Glenn Petersen — 7/20/2020 7:12:26 AM

EBay Nears Deal to Sell Classified-Ads Unit to Adevinta

Deal could value eBay unit at roughly $8 billion or more

By Ben Dummett, Corrie Driebusch and Cara Lombardo
Wall Street Journal
Updated July 20, 2020 1:12 am ET

EBay Inc. EBAY -0.89% is in advanced talks to sell its classified-ads business to Norway’s Adevinta AS ADE -0.69% A, according to people familiar with the matter, as the online auction pioneer seeks to refocus on its core marketplace business.

A cash-and-stock deal could be announced as soon as Monday assuming the talks don’t fall apart, the people said. The price of the deal couldn’t be learned but the eBay unit was expected to sell for roughly $8 billion or more, some of the people said.

San Jose, Calif.-based eBay, once a highflying internet conglomerate with brands like PayPal and StubHub, has been unwinding that structure under pressure from activist investors who argued it shrouded eBay’s value. The classifieds unit is one of the last remaining businesses outside the core after the company struck a deal to sell its StubHub ticketing division last year.

EBay’s classifieds unit primarily operates internationally across Canada, parts of Europe, Africa, Australia and Mexico. Its platforms allow users to post goods and services in their local communities, similar to Craigslist in the U.S. Last year, the division produced $1.1 billion in revenue, compared with the $7.6 billion its marketplace business generated.

EBay has been seeking to sell the unit since around February, when The Wall Street Journal reported that it was up for sale.

Adevinta oversees digital marketplaces in 16 countries, with a significant presence in parts of Europe, South America and Mexico. By acquiring the eBay business, Adevinta would significantly expand its presence in Germany, one of Europe’s biggest economies, where its current operation doesn’t hold a dominant position, according to the company’s website.

Adevinta’s bid appears to have beaten out those of a private-equity consortium and of Prosus NV. The deal would be a big bite for Adevinta—whose own market value amounts to little more than $8 billion—as it seeks to expand its customer base and geographic reach. At the same time, eBay would benefit from growth in the combined business by accepting stock as part of the deal.

The deal is a blow for Prosus, which has ambitions to expand its stable of internet businesses through a big acquisition. Earlier this year, the Amsterdam-listed company, which is controlled by South Africa’s Naspers Ltd., lost out to Netherlands-based Takeaway.com in a bidding war to acquire Just Eat, a U.K.-based food-delivery company.

EBay’s core marketplace business has suffered amid growing competition from Amazon.com, the U.S.’s biggest online retailer.

Elliott Management Corp. and Starboard Value LP have been urging eBay to boost its share price by shedding businesses the hedge funds had considered noncore. The funds received board seats in settlement agreements and the clash prompted Devin Wenig, eBay’s former CEO, to leave the company in September over disagreements on strategy. His departure coincided with the firing of six workers, who have since been charged by the Justice Department with leading a cyberstalking campaign against a Massachusetts couple.

In April, eBay appointed Jamie Iannone, formerly chief operating officer of Walmart Inc.’s e-commerce division, as its new chief executive. With Walmart recently overtaking eBay as the U.S.’s second-largest online retailer by share of online sales, according to eMarketer, the company is betting on Mr. Iannone’s experience to reignite growth.

Write to Ben Dummett at ben.dummett@wsj.com, Corrie Driebusch at corrie.driebusch@wsj.com and Cara Lombardo at cara.lombardo@wsj.com

wsj.com

[Ron] How EBay ran a hate campaign against a critic.. cockroaches on the doorstep, bl...

Ron — 6/23/2020 12:01:43 PM

How EBay ran a hate campaign against a critic.. cockroaches on the doorstep, bloody pig masks - six former workers charged but not the former CEO

https://www.wired.com/story/ebay-employees-charged-cyberstalking-harassment-campaign/?

“This was a determined, systematic effort by senior employees of a major company to destroy the lives of a couple in Natick, all because they published content the company executives didn’t like." - prosecutor

[Glenn Petersen] eBay names Walmart exec Jamie Iannone CEO Brian Heater@bheater / 8 TechCrunch :...

Glenn Petersen — 4/13/2020 10:25:50 AM

eBay names Walmart exec Jamie Iannone CEO

Brian Heater @bheater / 8
TechCrunch
:41 am CDT • April 13, 2020

Half a year after Devin Wenig stepped down as CEO, eBay is finally ready to name a permanent replacement. Following an appointment from the company’s board of directors, Jamie Iannone will step into the role as head of the company, effective April 27. The executive was also elected to eBay’s board.

Most recently, Iannone served as the COO of Walmart’s eCommerce division, having only been appointed the give a few months prior. Previously, he held a number of high profile executive gigs under the Walmart umbrella, including serving as the CEO of SamsClub.com. Other jobs include a four year stint at Barnes & Noble’s digital division (including Nook) and eight years as at eBay.

“In my previous experience with the company, I developed a deep appreciation for what makes eBay so special. eBay’s success has always been rooted in its robust C2C platform,” Iannone said in a release. “I believe the company has tremendous opportunities to capitalize on this foundation, innovate for the future and grow its ecosystem. I look forward to working with our global teams to enhance buyer experiences and provide more capabilities that will help small businesses sustain and grow. I will focus on continuing to evolve the company’s strategy while delivering on eBay’s commitment to maximize long-term shareholder value.”

Even more pressing than shareholder value at the moment (insofar as anything can be more pressing than shareholder value) is the company’s response to the on-going COVID-19 crisis. In late-March, eBay announced a crackdown on price gouging, and more recently, a waiving of seller fees to help struggling brick and mortars shift to a new, online selling paradigm. As with many other aspects of life, online retail is expected to be profoundly transformed by the global pandemic for some time to come.

techcrunch.com

[Glenn Petersen] Report: NYSE owner makes takeover approach to eBay Marisa Fernandez Axios Febru...

Glenn Petersen — 2/4/2020 8:01:55 PM

Report: NYSE owner makes takeover approach to eBay

Marisa Fernandez
Axios
February 4, 2019

eBay's shares rose nearly 10% on Tuesday after the Wall Street Journal reported New York Stock Exchange owner Intercontinental Exchange made a takeover offer for the e-commerce site.

The big picture: Intercontinental Exchange has previously approached the commerce giant, WSJ writes, citing people familiar with the matter. Still, the companies are not in formal talks and a deal remains uncertain.

-- WSJ speculates the offer could value the company at more than $30 billion, based on a premium to eBay's current $28 billion market cap.

-- Intercontinental Exchange is more interested in owning eBay’s marketplace business, rather than its classified unit.

-- `Intercontinental Exchange could use the takeover as a way to "apply its technological expertise connecting buyers and sellers" on eBay, WSJ writes.An eBay representative declined to comment when Axios reached out.

Go deeper: Trump goes after e-commerce counterfeiting

axios.com

[Sr K] WSJ wsj.com Nov. 29, 2019 9:13 am ET Eric Baker long envisioned bringing toge...

Sr K — 11/30/2019 1:52:44 AM

WSJ

wsj.com

Nov. 29, 2019 9:13 am ET

Eric Baker long envisioned bringing together the two ticketing companies he started.

This week eBay Inc. agreed to sell its StubHub unit, a business Mr. Baker launched nearly two decades ago, to Geneva-based Viagogo Entertainment Inc., the ticketing firm with a large European presence he has been running since 2006.

The $4.05 billion all-cash deal would create a global ticketing juggernaut in the booming business of live events. It would also put StubHub back in the hands of the person who early on saw the opportunity in the legitimate resale of tickets.

[Glenn Petersen] EBay to sell StubHub to Viagogo for about $4 billion in cash Published Mon, Nov...

Glenn Petersen — 11/25/2019 10:25:02 AM

EBay to sell StubHub to Viagogo for about $4 billion in cash

Published Mon, Nov 25 20198:38 AM EST
Updated 8 min ago
Elly Cosgrove @EllyCosgrove
CNBC.com

EBay plans to sell StubHub to Swiss ticket vendor Viagogo for about $4 billion.
The sale is expected to close by the end of the first quarter of 2020, subject to regulatory approval and customary closing conditions.
Viagogo CEO Eric Baker co-founded StubHub while in business school and left before the company was sold to eBay for $310 million in 2007, according to a release on Monday.

EBay on Monday announced plans to sell StubHub to Swiss ticket vendor Viagogo for $4.05 billion in cash.

The sale is expected to close by the end of the first quarter of 2020, subject to regulatory approval and customary closing conditions.

Ebay shares jumped roughly 2% on the news.

Viagogo CEO Eric Baker co-founded StubHub while in business school. He left before StubHub was sold to eBay for $310 million in 2007, according to the release. “It has long been my wish to unite the two companies,” Baker said.

The companies are likely to operate independently for some time while executives examine the best way to integrate the businesses, representatives for eBay and Viagogo told CNBC.

“The combined company will allow StubHub and Viagogo to realize efficiencies to re-invest in innovation,” the eBay spokesperson said.

There are no leadership changes as a part of Monday’s announcement, according to the spokespeople.

Interim eBay CEO Scott Schenkel told CNBC’s David Faber that proceeds from the deal will be put towards buybacks, dividends, and M&A investing, he said on CNBC’s “ Squawk on the Street” Monday morning.

Faber reported in July that eBay was moving forward with a potential sale of StubHub. The news followed eBay’s announcement that it was conducting a strategic portfolio review on March 1.

“Over the past several months, eBay’s leadership team and Board of Directors have been engaged in a thorough review of our current strategies and portfolio, and we concluded that this was the best path forward for both eBay and StubHub,” Schenkel said in Monday’s release.

When combined, StubHub and Viagogo will sell tickets across more than 70 countries, “giving fans seamless access to a wider selection of inventory around the world, while sellers, teams and artists will have the ability to more effectively reach a broader global audience,” the release said.

CNBC reached out to StubHub for further comment but has not immediately received a response.

The Wall Street Journal was the first to report this news on Monday.

cnbc.com

[zax] eBay Inc. (EBAY) +1.70 (+4.64%) eBay beats with revenues of $2.6B and EPS of ...

zax — 4/24/2019 10:14:19 AM

eBay Inc. (EBAY) +1.70 (+4.64%)

eBay beats with revenues of $2.6B and EPS of $0.67 as restructuring takes shape

As eBay continues to work through a restructuring strategy, the e-commerce marketplace and online auction pioneer reported earnings for the first quarter of the year that should keep some of the more activist shareholders a little at bay. The company reported revenues of $2.6 billion and non-GAAP net income of $608 million, or diluted earnings per share of $0.67 ($0.57 EPS on a GAAP basis).

Both numbers, in fact, exceeded analysts’ estimates. On average, they had predicted eBay to report EPS of $0.63 per share (on a range of $0.58 to $0.64) on revenues of $2.58 billion (range of $2.55 billion to $2.63 billion).

“We delivered a solid first quarter with revenue and EPS,” said Devin Wenig, president and CEO of eBay Inc., in a statement. “Our initiatives to create a next generation payment and advertising experience are on track, we saw healthy buyer growth and disciplined cost control, and we continue to simplify the buying process while remaining focused on seller’s success.”

</snip> Read the rest here: techcrunch.com

[Sr K] eBay declares dividend, set at .14/quarter, ex-div 2/28. Barron's says it only t...

Sr K — 1/30/2019 10:48:08 AM

eBay declares dividend, set at .14/quarter, ex-div 2/28. Barron's says it only took 24 years.

[Glenn Petersen] Nobody Thinks About eBay Even with 171 million users, the online shopping gian...

Glenn Petersen — 10/25/2017 10:08:22 PM

Nobody Thinks About eBay

Even with 171 million users, the online shopping giant is grasping for relevancy.

by Chavie Lieber
Racked
Oct 16, 2017, 10:26am EDT
Photography by Christie Hemm Klok

“Fill your cart with color,” read several giant billboards standing high above San Francisco’s highways this summer. Down below, in the city’s underground BART stations, loud posters with proclamations like, “Shop like nobody else because you aren’t like anyone else,” covered walls. On television — including during the NBA finals, in which local heroes the Golden State Warriors would ultimately clinch the title — ads featured footage of brown boxes rolling down a warehouse roller conveyer. Text on the screen read, “When did shopping get so beeeeeeeeeeeige?” before flashing dramatic shots of colorful sneakers and stacks of denim, along with sped-up clips of fly-fishing and leaf-blowing.

This was all the handiwork of eBay, the auction website that rose to fame by promising a treasure trove of used goods that could be delivered to your door, provided you make the winning bid. For years, it staked its reputation on antique collectibles and Beanie Babies. Then, its age started showing, and eBay decided to make a statement in recent months: We’re a fun, exciting shopping destination — they posited in this summer’s massive marketing push — not just for old car mufflers and used silver tea sets, but rather high-end accessories and next-generation drones.

“We have to tell our story differently because what people know about us is not really who we are anymore,” says Suzy Deering, eBay’s chief marketing officer, from the company’s sprawling San Jose campus one afternoon in August.

Prior to coming to eBay two years ago, Deering worked at Disney and Verizon. She knows about big brands and eBay brought her on with a complete overhaul in mind. “They think we're a used auction site,” she continues. “They don’t think of all the advancements we’ve made, so we have to show a modern eBay, one that looks and acts differently.” She puts a finer point on it: “We have all the things that so many brands want, but what we’re missing is the heart and soul.”

A mannequin stands behind a counter that reads “sell it here” at eBay’s San Jose headquarters."> Inside eBay’s San Jose headquarters
_______________________________

One of those things that so many brands want is scale: eBay is enormous. It has 171 million users, with 1.1 billion listed items at any given time. But it’s also no longer the only game in town. There’s competition from all over, most notably from eBay's great rival to the north, Amazon; Brooklyn-based crafts giant Etsy; and venture-backed consignment sites like The Real Real and Poshmark. Deering may talk of the company’s advancements, but the truth is, eBay has fallen far behind.

It’s dedicated to remaining an online marketplace — nothing more than a platform on which buyers and sellers can interact — a position that’s hard to justify as it’s become less enticing to both kinds of users. It hasn’t invested in warehouses or inventory; it hasn’t introduced competitive shipping programs. It now needs to both differentiate and elevate itself, and then it must communicate all of that to the customer.

These days, 88 percent of postings are “Buy It Now” items, not at all tied to the auction function eBay is known for, and 81 percent of what’s available for sale is new. To eBay, new means unopened, never-used items; this claim is murky, though, as most items are still coming from third-party sellers and not from brands themselves. In fact, eBay has become a haven for flipping, a practice in which users sell in-demand merchandise at exponentially higher prices, further adding to eBay’s sometimes-dubious reputation.

“We have all the things that so many brands want, but what we’re missing is the heart and soul.”
eBay also thinks it’s positioned to acquire Millennial and Gen Z customers who have largely ignored the site. “Younger customers don’t have misperceptions of eBay — they don't have any perceptions,” says Deering. “We’re not even in their awareness at all.”

The company’s research has found that a younger audience wants unique products and “is searching for items that push against conformity.” In this way, Deering believes eBay can be something of a foil to Amazon: “People felt like they were becoming anti-human because Amazon is so habitual, but that isn’t us. If you love Converse, you come to our site because there’s every color, every graffiti-ed version, vintage. You’re not going to get that if you go onto Amazon or into a department store.”

The goal, as eBay’s vice president of merchandising Jay Hanson puts it, is to get customers to think of eBay as the first shopping site they should visit, no matter what they’re looking to buy. But can the once-dominant company actually take that crown from Amazon? Or compete with much nimbler startups that offer white-glove services and more curated and easily navigated shopping experiences? It seems wildly unlikely, but eBay’s determined to try.

Amazon and eBay have always been inextricably linked. Software engineer Pierre Omidyar wrote the code for AuctionWeb, as eBay was first called, over Labor Day weekend 1995. Just two months before that, Jeff Bezos had launched Amazon from his garage in Seattle.

In the beginning, Amazon functioned just like your local bookstore, albeit online, in that shoppers could browse the site’s selection and then purchase what they wanted directly from Amazon. eBay, on the other hand, was a user-to-user experience, without any sort of interference (or help) from the company. It was a platform on which to buy and sell everything, from long-forgotten oddities you’d find in your grandmother’s attic to rare watches and Elvis Presley memorabilia. Omidyar envisioned his website as a utopia, says Adam Cohen, author of The Perfect Store: Inside eBay, “a perfect marketplace where anyone could have an opportunity at commerce.”

eBay’s initial popularity stemmed from the novelty of it all, not just in terms of the merchandise, but also the auction system. One early user told CBS, “there are times where I see something cool and I must have it; I don't need it, but I'm not going to let anyone outbid me.” Rather than mediating disputes between buyers and sellers, Omidyar enabled forums and message boards, as well as the ability to rate users and leave reviews. The social component of eBay became one of its calling cards.

12 lunch boxes mounted on a wall at eBay."

Amazon’s sales surpassed eBay’s early on. By launching in the UK and beginning to sell CDs and DVDs, Amazon’s sales soared to $610 million by 1998, while eBay saw sales of $47.4 million during that same time (eBay would expand internationally the next year). Still, many shoppers considered eBay the more important e-commerce player, according to Cohen, because anyone could set up shop and start a business. Sellers are even given the option to sign up for a professional account and pay a monthly fee in exchange for the ability to list a large number of items. Amazon was selling products traditionally (albeit masterfully), but eBay offered users a chance to both spend and make money. “eBay monopolized the space because there was a virtuous circle,” says Cohen. “The buyers were going where the sellers were going and vice versa. It had this first-mover advantage.”

The company filed for IPO in 1998, following a blockbuster year. Omidyar had changed the name of the site from AuctionWeb to eBay, and the site was hosting nearly 800,000 auctions a day, with traffic skyrocketing thanks in part to an AOL partnership that placed eBay on its homepage. By 1999, eBay’s revenue hit $224.7 million, with Marketwatch calling the company an “unstoppable locomotion.”

Amazon earned more than triple eBay’s revenue as it continued to invest in pricey and popular inventory like electronics, something Time magazine recognized when it put Bezos on its cover as Person of the Year in 1999 and relegated eBay to the inside of the magazine. That same year, the Wall Street Journal criticized eBay for being a mere middleman for buyers and sellers, a business model it did not deem sustainable and, more importantly, “could be easily copied.” Lo and behind, November 2000 saw the launch of Amazon Marketplace, a hub for third-party sellers to list new or used merchandise.

Amazon Marketplace has grown significantly in the last 17 years. Today nearly half of all products sold on Amazon come from the Marketplace, which sells about 2 billion items and brings in an estimated $132 billion in sales each year, according to e-commerce consultancy firm ChannelAdvisor.

eBay has, of course, seen growth too. The site now has more than 20 million sellers across the world. It’s also introduced new ways to shop, including the fixed-price, Buy It Now option, which launched in 2002. But the company has spent most of its energy diversifying through big-name acquisitions — buying PayPal in 2002 for $1.5 billion, a 25 percent stake in Craigslist in 2004 for what is believed to be around $15 million, Skype in 2005 for $2.6 billion, and StubHub in 2007 for $310 million. Each acquisition provided eBay with a sense of renewed relevancy and cash flow, but it found itself allocating much of its resources and manpower to these businesses while leaving its flagship site largely untouched.

eBay CEO Devin Wenig has publicly stated the company isn’t interested in taking on Amazon. As Amazon continues to rethink what it means to be an online shopping site by introducing various services, gadgets, private labels, and physical stores, eBay is committed to staying in its lane as a digital marketplace, even as Amazon Marketplace sees record-breaking sales. Sellers are flocking to Amazon; according to a study by Marketplace Plus, more than 1,000 new sellers join every day.

Some merchants still say eBay is the better choice: Amazon takes more of a profit cut, and the site has various barriers to entry for sellers. But Amazon does sweeten the deal for merchants in other ways. With Fulfillment by Amazon, introduced in 2006, sellers pay a fee and Amazon handles the storage and shipment of merchandise, as well as customer service. Opting into FBA also gives merchants access to shoppers with Amazon Prime. eBay’s strategy of not getting involved with inventory or logistics has helped keep company costs down, but it’s also made it less desirable for sellers.

“The FBA program is extremely unique compared to any other marketplace,” an investor at Seeking Alpha wrote last year. “There is no other marketplace (eBay, Wal-Mart, Best Buy, etc.) where the marketplace fulfills items on behalf of the seller. That is why these marketplaces are not growing nearly as rapidly.”

There are also a host of shiny resale startups, all backed by venture capital, that have helped the resale market grow to $18 billion. The RealReal launched six years ago with the value proposition that there needed to be a more trustworthy eBay. With revenue expected to surpass $500 million this year, founder Julie Wainwright says sellers in the luxury space prefer The RealReal to eBay because the company holds sellers’ hands, and buyers prefer it because the site rigorously authenticates items to weed out any possible fakes.

“We do all the work!” says Wainwright. “We go to their home and pick up their items and bring the items back to one of our warehouses for processing, which includes inspection and authentication, photography, copywriting, merchandising, pricing, selling, and shipping.”

While eBay was once known for its forums and message boards, Poshmark, another venture-funded resale startup, has become popular because of its community-oriented platform. The app is a social shopping destination, where shoppers can comment on listings and interact with sellers. Poshmark also offers limited-time events it calls “parties,” in which sellers curate virtual showrooms organized by theme. About $4 million worth of inventory gets listed on Poshmark every day; TechCrunch estimates the company is on track to see $100 million in revenue for 2017, doubling from last year.

There are other players stealing market share too, including Tradesy and ThredUp, the latter of which is performing so well (20 million users and a $500 million valuation) that it’s opening physical stores at a time when other companies are closing doors by the hundreds.

In the shadow of competitors big and small, eBay has remained stagnant. Its 2016 net revenue hovered just under $9 billion — a significant figure, but one that's only marginally risen over the last for five years. Analysts attribute eBay’s shortcomings to outdated technology and a confounding user experience.

“The eBay site hasn’t really gone through dramatic levels of change since the beginning, and if there was any change, it was subtle and not slick enough,” says Sean Maharaj, a director at global management consulting firm AArete. “The customer interface, the website, it is not on par with some other companies that are coming at this with a new digital strategy. It’s unfriendly and it’s not easy to navigate.”

One of eBay’s main bragging points — that it has 1.1 billion listings — has also become a source of weakness for the company. Organizing that many items is a herculean task, particularly when the bones of the site are now decades old. Greg Portell, a retail partner at global strategy and management consulting firm A.T. Kearney, understands why eBay positioned itself for so long as a marketplace for everything and anything, as opposed to offering a more edited selection of products.

“If you think of successful retailers like T.J. Maxx or Marshall’s, you can justify it,” says Portell. “They aren’t known to be very neat and tidy, and they do extremely well. My guess is eBay was emphasizing this attitude, as opposed to a clean, personalized experience you’d expect from a well-curated store. eBay’s problem now, though, is they are stuck in a middle space where it’s hard to differentiate. You have smaller, niche sites that can curate and provide a less cluttered environment, which is what’s growing right now.”

“We’re currently on the precipice of changing fashion, big time,” says Steve Yankovich, eBay’s chief product architect. “We’re doing a lot to focus on fashion because it’s a trillion-dollar business that’s only just starting to get penetrated.”

Yankovich describes his job as “somehow getting customers to that one product and saying ‘Awesome, buy!’ out of a billion-plus.’” He says that where eBay has always won is in “mission shopping” — coming to the website looking for a very specific item. Where eBay recognizes it falls short is in what it calls the “browse, discover, and inspire” kind of shopping.

eBay has been playing catch up for years now. In one ongoing effort, it’s started organizing inventory by implementing structured data — a process by which listing something to the site is uniform and consistent, as opposed to the contextless, ad hoc posting of years past.

One related initiative was making cleaner listings mandatory for professional sellers, which in turn made items more visible on external search engines and made the site more searchable itself. eBay also now groups merchandise by product type and brand — for example, there’s a new, nicely-designed Coach handbag landing page. eBay CEO Devin Wenig, who was not made available for this story, told investors in a call this winter that eBay has created 180 million landing pages using this new method of organizing eBay’s data. It’s unclear if those pages are helping eBay with customer acquisition — especially when it comes to the younger demographic its marketing campaign is aiming to entice — but Wenig said they’ve helped lower eBay’s bounce rate.

This kind of improvement comes across as an odd brag for the company; category and brand landing pages have long been standard on e-commerce sites. Yankovich admits the structured data project is a massive undertaking — the site does, after all, have 1.1 billion items and can’t ask sellers to rebuild old listings. It also can’t completely overhaul its site, as that would no doubt confuse its 171 million users, many of whom have been using the site for years. However, eBay promises the site will soon be easier to navigate and that personalization is finally coming.

One personalized feature coming by the end of this year is called “related topics,” in which the homepage will show listings that other shoppers with similar search history have looked at — something known as collaborative filtering. Amazon has already been doing this for years with its “customers who bought this item also bought” module. Another addition will be “interest” pages, where eBay will add one or several of 250 categories to a user’s homepage feed, based on activities (yoga, baking, skiing), passions (dogs, collectible coins, Star Wars), and styles (athleisure, avant-garde, minimalist) for which they’ve shown preference. This is a machine-learning algorithm called clustering, a tool that companies like Spotify, Netflix, and Twitter are already using.

In September, eBay rolled out a heart-shaped button that places products, brands, and sellers onto wishlists. The move puts eBay more in line with social networks like Instagram and Facebook, which have become hot marketplaces themselves, although wishlist functions have long been available on myriad e-commerce websites. Earlier this summer, eBay also added a visual search tool, in which shoppers can snap photos of things they see out in the world or upload a photo they found online to the site, and find the item or something close to it on eBay. Pinterest rolled out a similar tool in 2015.

Earlier this year, eBay announced free 3-day shipping on 20 million items and price-matching with Best Buy, Walmart, and Amazon for its daily sales section. Amazon has long been killing the customer acquisition game with fast and free shipping, not to mention its proprietary algorithm that basically acts as a price-matcher.

Perhaps the biggest change coming to eBay is the luxury verification program it’s rolling out now. Called eBay Authenticate, the program is accepting handbags with a market value of at least $500 from 12 different brands (for context, The Real Real authenticates over 100 designers). Sellers using the program — which will eventually expand into jewelry and watches, and will include other designers — will be able to ship luxury items to a warehouse. There, a team from a third-party company, which eBay is not naming, will authenticate the product, take photos, and complete the listing for the seller. Laura Chambers, eBay’s vice president of consumer selling, adds that eBay’s new service will include premium shipping packaging, as well as a dust bag and authentication papers; each authenticated item will also have a special icon added to its listing on the site.

eBay is charging a 20 percent commission for the service. This tends to be less than The Real Real, which can take up to 50 percent, although The Real Real operates on a sliding scale based on an item's original resale value and a seller's net sales, so it can take as little as 15 percent. eBay also offering to pay customers double what they’ve spent if a product sold through its authentication program turns out to be fake.

“I think some sellers are just a little bit hesitant right now,” says Chambers, “and they need to have this confidence to sell with us.”

Chambers adds that the company’s previous hands-off attitude is something it can no longer afford to have as competition heats up. “The authentication program is a good example of how we’re getting a little bit more involved,” she says, “and it represents a shift for us in terms of how we want to get in the transaction now.”

eBay intends to advance into luxury well beyond authentication. Hanson, eBay’s merchandising VP, says brands like Adidas, Calvin Klein, Puma, Vera Bradley, and Vince Camuto have had official eBay stores stocked with new merch for years, though these shops are exceedingly hard to find. Now eBay is talking with several high-end fashion companies (it’s declined to name them at this time) about having them selling directly on eBay too. The company knows getting luxury brands could have a significant impact on its reputation as an online retailer.

Forging such partnerships would, no doubt, be a jab at Amazon, which hasn’t had an easy time courting luxury companies to sell directly on Amazon Fashion, although both eBay and Amazon have sold counterfeits in the past. Chambers says its new authentication program will show luxury companies that eBay is dedicated to bolstering the companies on its site and is committed to authenticity. In the meantime, eBay has been pursuing a back door of sorts. A few weeks ago, it announced a partnership with fashion startup Spring, which has its own direct partnerships with some 1,500 brands, including Gucci, Prada, and Saint Laurent.

It’s standard for Silicon Valley giants to chase each other’s innovations and even blatantly rip one another off. Facebook is forever on the tail of Snapchat. Apple constantly copies Samsung and vice versa, and Apple and Google have settled lawsuits over patents and employee poaching. (Steve Jobs loved to invoke the famous Pablo Picasso quote, “Good artists copy, great artists steal.") The difference is that most of these competitive moves happen over short timelines, perhaps a few months or a single year. eBay, however, is many years behind and is only just now trying to get up to speed. And even if it is able to do so, what happens next?

eBay is firmly entrenched in the resale market — a sector that, according to research firm Fung Global Retail & Technology, is growing 20 times faster than retail overall, and could hit $33 billion by 2021. Industry research has also found that younger shoppers are taking to second-hand shopping faster than Gen X or Baby Boomers. Perhaps eBay’s energy would be best spent leaning into its long-held reputation and innovating in that space. Competing with Amazon on the “new” end of the retail spectrum is futile, but they could credibly fight off threats from startups like The Real Real and Poshmark. Many still believe eBay is the best option for vintage treasures, so why not own it? For now, though, the company has its sights set on pushing in the other direction, emphasizing the supposed shiny newness of what their sellers offer.

“When you start realizing that people only think of you as auction or used, you have to go in and over-index on the other side,” says CMO Suzy Deering. “You have to say, ‘Hey, we're modern, and by the way, look at all this cool stuff we've got.’ We still have strength, we still have velocity that is completely unmatched. The difference is we have to make sure that people think about us. That is the number one challenge.”

Chavie Lieber is a senior reporter at Racked.

Editor: Julia Rubin
Copy editor: Laura Bullard

https://www.racked.com/2017/10/16/16473414/ebay-online-shopping-resale

[Sr K] WSJ page 1 today: PayPal’s Market Value Eclipses AmEx, Nears Morgan Stanley, Go...

Sr K — 10/14/2017 2:46:34 PM

WSJ page 1 today:

PayPal’s Market Value Eclipses AmEx, Nears Morgan Stanley, Goldman

Mobile-payments company’s shares surge as market capitalization climbs to about $83 billion

By Peter Rudegeair

Oct. 14, 2017 9:00 a.m. ET

PayPal Holdings Inc. vaulted over American Express Co. in terms of market value this week, punctuating a rally that has pushed up the payments company’s shares by nearly 75% since the start of 2017.

The San Jose, Calif.-based company has enjoyed breakneck growth in both e-commerce and mobile money transfers. Its market capitalization stands at about $83 billion, nearly double the $47 billion value it had when it spun off from eBay Inc. a little over two years ago.

[paywall]

[JakeStraw] Ebay to launch visual search tools for finding products using photos from your p...

JakeStraw — 7/26/2017 12:07:56 PM

Ebay to launch visual search tools for finding products using photos from your phone or web
techcrunch.com

[JakeStraw] How EBay's CEO Plans to Take On Amazon finance.yahoo.com

JakeStraw — 9/19/2016 7:57:05 AM

[JakeStraw] Too lazy to ship off your old stuff? eBay can help with that cnet.com The onlin...

JakeStraw — 3/15/2016 3:44:42 PM

Too lazy to ship off your old stuff? eBay can help with that
cnet.com

The online marketplace expands its partnership with a logistics startup to help deal with the hassle of shipping products sold on its site.

[more100] eBay (EBAY) reported in line fourth quarter adjusted earnings per share from con...

more100 — 1/28/2016 9:17:35 AM

eBay (EBAY) reported in line fourth quarter adjusted earnings per share from continuing operations and revenues. The company’s full year guidance was weak. PayPal (PYPL), which was spun-off from eBay, reported better than expected fourth quarter results but issued lukewarm guidance for 2016.

[Glenn Petersen] EBay's disappointing forecast fuels stock decline By Mari Saito and Sai Sachin...

Glenn Petersen — 1/27/2016 9:06:58 PM

EBay's disappointing forecast fuels stock decline

By Mari Saito and Sai Sachin R
Reuters
Wed Jan 27, 2016 7:52pm EST

EBay Inc forecast weaker-than-expected revenue and profit for the current quarter and full year, as the e-commerce company struggles against a strong dollar while trying to revamp its core marketplace business.

Shares of the retailer fell more than 12 percent to $23.51 in extended trading on Wednesday.

The online retailer, which faces intense competition from e-commerce giant Amazon.com Inc, has also been hit by brick-and-mortar rivals like Wal-Mart Stores Inc that are aggressively boosting their online presence.

The company said its gross merchandise value, or the total value of all goods sold on its site, rose 5 percent after accounting for foreign exchange impact.

Under its new chief executive Devin Wenig, eBay has returned to its roots, refocusing on unique inventory and smaller sellers.

"I want to grow our metrics faster but I am very pleased with where we are," said Wenig in an interview with Reuters.

The company forecast full-year adjusted profit of $1.82-$1.87 per share and revenue of $8.5 billion-$8.8 billion.

That was lower than analysts' average expectation of $1.98 per share in profit and $8.99 billion in revenue, according to Thomson Reuters I/B/E/S. In 2015, it reported $8.6 billion in revenue.

Its forecast for first-quarter adjusted profit of 43-45 cents per share and revenue of $2.05 billion-$2.10 billion also missed analysts' average estimates.

In its second quarter without PayPal, eBay's revenue was $2.32 billion in the fourth quarter ended Dec. 31, flat with a year earlier during the crucial holiday shopping season and in line with analysts' average expectations.

Online sales in the United States jumped 9 percent to $105 billion in the November-December holiday period, according to the National Retail Federation.

"While not a direct competitor in every respect, the growth of (Amazon's) successful Prime service has locked more customers into using its services and sites in a way that is unhelpful to eBay," said Carter Harrison, a retail analyst at research firm Conlumino.

EBay began testing a paid shipping membership program in Germany last year, responding to shoppers' increased demand for faster delivery.

Wenig on Wednesday said there were "no plans for now" to expand the program.

EBay derives nearly 60 percent of its revenue from overseas and faces headwinds from a strong dollar.

Excluding the effects of currency changes, eBay's revenue grew 5 percent in the quarter.

The company's net income fell to $477 million, or 39 cents per share, from $1.02 billion, or 82 cents per share.

(Reporting by Sai Sachin R in Bengaluru and Mari Saito in San Francisco; Editing by Savio D'Souza, Stephen R. Trousdale and Bernard Orr)

reuters.com

[Glenn Petersen] EBay Off to Encouraging Start in Post-PayPal Era Spencer Soper BloombergBusines...

Glenn Petersen — 10/21/2015 8:48:54 PM

EBay Off to Encouraging Start in Post-PayPal Era

Spencer Soper
BloombergBusiness
October 21, 2015 — 3:21 PM CDT Updated on October 21, 2015 — 5:48 PM CDT

EBay Inc. reported third-quarter profit and sales that topped analysts’ estimates, raised its outlook for the year and bought back $599 million of its own stock, showing investors that the online marketplace is on solid ground after its recent split with PayPal.

The results also confirmed that the company is recovering from a data breach and Google Inc. search-engine changes last year that hurt e-commerce traffic, as the company heads into the critical holiday shopping season. Given the challenges, all EBay had to do was avoid any stumbles after the separation with PayPal Holdings Inc. in July, said Mark Mahaney, an analyst at RBC Capital Markets. EBay shares jumped as much as 11 percent in extended trading.

"There were fears the company would miss estimates," said Mahaney, who has the equivalent of a hold rating on the stock. "The fact that it didn’t was all anyone was really looking for in this market.

The goal of July’s split was to make sure that each company could focus on their main businesses. EBay is facing especially fierce competition from Amazon.com Inc., Wal-Mart Stores Inc. and other retailers ahead of the year-end holiday shopping season. The challenge for Chief Executive Officer Devin Wenig is to catch up with the industry’s growth rate; U.S. e-commerce sales are projected to hit $79.4 billion in November and December, up 14 percent from a year earlier, according to EMarketer.

Higher Guidance

Profit, excluding items, was 43 cents a share on revenue of $2.10 billion, compared with analysts’ average projection for 40 cents and $2.09 billion, according to data compiled by Bloomberg. Sales were $2.15 billion in the same period a year earlier, excluding PayPal, the San Jose, California-based company said in a statement Wednesday.

For the full year, EBay raised its profit forecast to $1.80 to $1.82 a share, from $1.72 to $1.77. Analysts were expecting, on average, $1.78. The revenue outlook for a rise of 3 to 5 percent was unchanged.

"This is still a great business and it’s growing," Wenig said.

Shares of EBay rose to a high of $26.90 in in extended trading. The stock, which declined less than 1 percent to $24.21 at the close in New York, is down 13 percent since the split was completed July 20. EBay said it still has $2.4 billion remaining on its share repurchase program.

Buyers, Sellers

EBay, which attracts 159 million buyers and had $19.6 billion in gross merchandise volume in the latest quarter, has been taking steps to streamline itself and boost its appeal to merchants. The company killed its U.S. same-day delivery service EBay Now and struck a deal to sell its enterprise unit, which provided warehousing, delivery and customer support for web merchants, for $925 million to a private equity group.

The online marketplace is also collecting data to show buyers merchandise that they might be interested in buying, instead of relying on searches alone, Wenig said. Search engines, which rely on persistence as a measure, punished EBay because so many of its listings come and go within seven days, he said.

He also highlighted EBay Plus, an initiative launched in Germany in September where customers pay a fee in exchange for free delivery, similar to Amazon’s Prime subscription service. He also said strong growth of its event ticket marketplace StubHub helped the quarterly results, and the company will continue to expand it abroad.

The e-commerce company is also implementing changes to its seller-rating system so that sellers aren’t penalized for late shipments beyond their control or routine returns and exchanges. This is aimed at growing EBay’s base of 25 million merchants and keep them from shifting inventory to competing sites such as Amazon and Etsy Inc.

"There’s this collective sigh of relief out there that things aren’t falling apart," said Steve Weinstein, an analyst at ITG.

bloomberg.com

[Glenn Petersen] PayPal Shares Pop 8.3 Percent Following eBay Split Valuing PayPal At More Than $...

Glenn Petersen — 7/20/2015 4:06:57 PM

PayPal Shares Pop 8.3 Percent Following eBay Split Valuing PayPal At More Than $50 Billion

by Romain Dillet ( @romaindillet)
TechCrunch
July 20, 2015

Everybody expected PayPal ( NASDAQ:PYPL) to be worth more than eBay following its split with its parent company ( NASDAQ:EBAY), but not that much. After a short period of trading on a “when issued” basis, PayPal is now officially an independent company. On its first day of trading, shares opened at $41.63, 8.3 percent above Friday’s last temporary closing price before its public introduction.

With shares trading at $41.63, it values the company at $50.8 billion, above eBay’s current intraday valuation of $34.5 billion. PayPal shares are now trading at $40.21 minutes after NASDAQ’s opening bell. Shares are still up 4.74 percent even with this small market correction.

As a reminder, shortly after PayPal’s first IPO, the company was acquired by eBay in July 2002 for $1.5 billion. The same company is now worth 33 times its last public valuation. Until now, PayPal has managed more than 18 billion transactions and over $1 trillion. It now has 165 million consumers in 200 countries.

In other words, PayPal is no longer the shiny new fintech startup. It’s a full-fledged finance heavyweight, ready to report quarterly earnings again. It faces competition from local giants, such as Alibaba’s Alipay, and newcomers, such as Stripe.

Today’s split is great news for the payment company, as it will give it more freedom to raise additional capital and acquire other companies. Now that PayPal is no longer just an eBay subsidiary, shareholders clearly demonstrate that they want to hold shares in PayPal, not eBay.

Moreover, PayPal’s executives can now issue bonds without going through eBay. It can also acquire companies using PayPal stock and more. It’s going to be an interesting new journey for PayPal.

techcrunch.com

[Glenn Petersen] eBay Reports Q2 Revenues Of $4.4B, EPS Of $0.76, Sells Enterprise Division For $...

Glenn Petersen — 7/16/2015 10:31:39 AM

eBay Reports Q2 Revenues Of $4.4B, EPS Of $0.76, Sells Enterprise Division For $925M

by Ingrid Lunden ( @ingridlunden)
TechCrunch
July 16, 2015

In its last quarter before the spin off of PayPal as a separate company, e-commerce giant eBay today reported its Q2 earnings for the quarter that ended June 30.

The company reported total revenues of $4.4 billion and diluted earnings per share (non-GAAP) of $0.76, excluding eBay Enterprise (which eBay says it is in the process of selling for $925 million). Analysts had expected sales of $4.5 billion with an EPS of $0.73, but eBay says those estimates included eBay Enterprise — meaning that eBay beat expectations on both revenue and EPS.

The company says that eBay Enterprise on its own made $300 million of revenue in the quarter. It is now being represented as discontinued operations. In a seperate statement, the company said that Sterling Partners, Longview Asset Management, and Innotrac Corporation, a Sterling Partners portfolio company, together in partnership with companies owned by the Permira Funds would pay $925 million for the division.

“Based on the expected sales proceeds, the Company recorded an impairment of eBay Enterprise goodwill in the amount of approximately $786 million,” the company noted.

GAAP net income excluding this was $682 million.

“We are very pleased with our overall Q2 performance. PayPal and eBay both delivered strong Q2 results and have strong momentum. Dan, Devin and their respective teams are executing well and are prepared to create the next great chapter for PayPal and eBay,” said eBay Inc. President and CEO John Donahoe in a statement.

Drilling down into specific segments, PayPal’s revenues were $2.3 billion on payment volume of $66 billion. The latter figure is up 20% on a year ago.

There is some evidence in PayPal’s numbers that speak to the company having continued to grow its business independent of eBay: merchant services were volume up 27% while interestingly on eBay volume it was down 1%. Volume in eBay Marketplaces is now 22% of PayPal’s total volume, or $14.5 billion. PayPal grew new active accounts 11% to 169 million and processed 1.1 billion transactions, the company noted.

That will also be underscored by the company moving deeper into new categories of payments like money transfers, specifically by way of its acquisition of Xoom.

“We anticipate that acquiring Xoom will help accelerate PayPal’s entry into the $600 billion global remittance market, and that adding additional services to our technology platform will allow PayPal to amplify its consumer flywheel, creating a more powerful network effect,” the company noted.

eBay itself, the bigger part of the business, didn’t fare as well. It noted that eBay Marketplaces gross merchandise value declined 2%, “with the continuing strength of the dollar significantly impacting results.” On an FX-neutral basis, eBay says it grew 6%. Total revenue for the quarter was $2.1 billion, down 3% (up 5% on an FX-neutral basis).

“I am encouraged by the state of our business and the progress against our strategy. As eBay celebrates its 20th anniversary this year, we are making rapid changes to position the company for the future,” said Devin Wenig, President of eBay, in a statement. “My goal, and that of the entire leadership team, is for eBay to be the best global marketplace and a great enduring Internet business. As we move into our next chapter, we also look forward to continuing our strong partnership with Dan and the PayPal team.”

eBay also gave an update on full year 2015 results:

It expects PayPal Holdings, Inc. net revenues to grow 15% – 18% on an FX-neutral basis with GAAP earnings per diluted share in the range of $0.89 -$0.95 and non-GAAP earnings per diluted share in the range of $1.23 – $1.27, not including the Xoom business.

Meanwhile, eBay expects net revenues to grow 3% – 5% on an FX-neutral basis with GAAP earnings per diluted share in the range of $1.40 – $1.45 and non-GAAP earnings per diluted share in the range of $1.72 – $1.77.

More to come after the call.

Updated with clarification on estimates and revenues in first paragraph.

techcrunch.com

[JakeStraw] eBay bids for a chance at success after PayPal split cnet.com The struggles and...

JakeStraw — 7/15/2015 1:49:15 PM

eBay bids for a chance at success after PayPal split
cnet.com

The struggles and triumphs of eBay could shape where we buy things online and for how much. Here's why.

[sfnsie] We may have here a breakout to watch over 63.30 and a possible strong upside mov...

sfnsie — 7/6/2015 8:52:53 AM

We may have here a breakout to watch over 63.30 and a possible strong upside movement. Technical 72% chance up at foxchart.

[Glenn Petersen] Xoom shares skyrocket more than 20% after PayPal bid Eugene Kim Business Inside...

Glenn Petersen — 7/1/2015 9:47:44 PM

Xoom shares skyrocket more than 20% after PayPal bid

Eugene Kim
Business Insider
Jul. 1, 2015, 5:48 PM

PayPal is acquiring digital money transfer service Xoom for roughly $890 million. PayPal is paying $25 per share, about a 32% premium Xoom's 3 month weighted average price.

Xoom's shares are up more than 20% in after hours.

Xoom allows users to send money online or through mobile devices around the world. Last year, it had about $159 million in sales. At today's closing, Xoom had a market cap of around $800 million.

Through this deal, PayPal says it will be able to expand on its 68 million active US customers. Xoom says it had more than 1.3 million active customers making money transactions worth approximately $7 billion last year.

Xoom will remain a standalone service even after the acquisition.

"Acquiring Xoom allows PayPal to offer a broader range of services to our global customer base, increase customer engagement and enter an important and growing adjacent marketplace. Xoom’s presence in 37 countries – in particular, Mexico, India, the Philippines, China and Brazil – will help us accelerate our expansion in these important markets," Dan Schulman, President of PayPal, said in a statement.

PayPal, a payments service eBay acquired for $1.5 billion in 2002, is in the process of spinning off as a standalone company. It is expected to become an independent company traded on NASDAQ by July 17.

businessinsider.com

[Glenn Petersen] EBay Board Approves PayPal Spinoff; Stock Distribution Set For July 17 By Teres...

Glenn Petersen — 6/26/2015 6:04:52 PM

EBay Board Approves PayPal Spinoff; Stock Distribution Set For July 17

By Teresa Rivas
Barron's
June 26, 2015, 4:33 P.M. ET

Shares of eBay ( EBAY) are up 0.3% in after hours trading just minutes after the company said that its board of directors approved the completion of the PayPal spinoff.

According to the press release, eBay stockholders on record as of July 8 will receive one share of PayPal common stock for each share of eBay common stock. The distribution of PayPal stock will be on July 17.

Earlier this month, Wells Fargo said that PayPal’s openness would help defend it from Apple’s ( AAPL) Apple Pay.

EBay shares closed down in regular trading but have gained 23% in the past year.

blogs.barrons.com

[Glenn Petersen] EBay Sells Back 28.4% Stake in Craigslist, Ending Litigation Bloo0mberg June 18...

Glenn Petersen — 6/19/2015 11:52:14 AM

EBay Sells Back 28.4% Stake in Craigslist, Ending Litigation

Bloo0mberg
June 18, 2015

EBay Inc. said it has sold its 28.4 percent equity stake in Craigslist Inc. back to the online classified advertising company.

With the sale, all litigation between the companies will be dismissed, EBay said in a statement Friday. Terms of the sale weren’t disclosed.

EBay’s 2004 purchase of the stake and its subsequent creation of its own online classified site, Kijiji, prompted Craigslist to mount takeover defenses and file lawsuits in California and Delaware. Kijiji was later renamed EbayClassifieds.com.

EBay, based in San Jose, California, is scheduled to complete the spinoff of its PayPal payments division in the third quarter to create two publicly traded companies.

finance.yahoo.com

[Glenn Petersen] PayPal To List On Nasdaq Under PYPL Ticker After eBay Spinoff by Ingrid Lunden...

Glenn Petersen — 5/14/2015 3:15:30 PM

PayPal To List On Nasdaq Under PYPL Ticker After eBay Spinoff

by Ingrid Lunden ( @ingridlunden)
TechCrunch
May 14, 2015

Payments company PayPal is inching closer to spinning off from its marketplace parent eBay. Today its designated CEO, Dan Schulman, announced that it plans to list on Nasdaq and use PYPL as its ticker — the original ticker it used before eBay acquired it in 2002.

The company plans to spin off eBay in the second half of this year. To date, some 18 billion transactions and over $1 trillion in payments have passed through its platform, and it now has 165 million consumers in 200 countries.

While PayPal blazed a trail for online payments when it first launched in 1998, today the company faces a lot of competition, from traditional payment providers like banks and credit companies through to other large new entrants like Apple and newer startups like Stripe. Unsurprisingly, Schulman is therefore highlighting his company’s legacy in the space.

“This is a meaningful symbol for the company because it represents our unbroken commitment to the spirit of the original vision that the sparked the launch of PayPal 17 years ago,” he writes.

Since eBay announced in September 2014 that PayPal would be separating from eBay, PayPal has been making some strategic acquisitions and rolling out new products to build out its own standalone business, or as Schulman describes it, “to create the operating system for a world in which all commerce is digital commerce.” This has included adding bitcoin payments, new one-touch payments coming to the web (announced in April 2015) and buying mobile wallet Paydiant.It had already been carving out a position for itself as a payments provider outside of eBay, touching both online merchants and others who need to take payments as well as consumers and businesses that need to make payments, but its current owner still accounts for a very large portion of the business that passes through PayPal (and will continue to do so even after the spinoff).

techcrunch.com

[Glenn Petersen] PayPal Unit Helps Lift eBay Revenue By MIKE ISAAC New York Times APRIL 22, 201...

Glenn Petersen — 4/22/2015 6:29:09 PM

PayPal Unit Helps Lift eBay Revenue

By MIKE ISAAC
New York Times
APRIL 22, 2015

EBay is speeding toward a split of its online marketplace and payments businesses into two companies. For some analysts and investors, that day cannot come soon enough.

EBay on Wednesday reported earnings of $626 million for the quarter that ended March 31, swinging back to profitability after a $2.32 billion loss in the same period a year ago that included a hefty one-time tax charge. Excluding the tax charge, the company’s income grew 4.8 percent from a year ago. Revenue rose 4 percent, to $4.45 billion, surpassing analysts’ estimates of $4.42 billion.

The results illustrate a divergence in eBay’s two businesses. Sales in the company’s marketplace business fell 4 percent to $2.07 billion from a year ago, a lackluster showing that continued the trend of declining e-commerce growth over the past four quarters. It is the unit’s first year-over-year revenue drop since 2009, following the global financial crisis.

In contrast, the company’s PayPal electronic payments unit posted revenue of $2.1 billion, up 14 percent from $1.845 billion a year ago.

EBay's stock activity over the last six months.
_________________

The earnings are a progress marker for eBay as it divides into two parts this year. The separation was a change in strategy from what John Donahoe, eBay’s chief executive, had described as his vision for the company in the past. Only recently has eBay started to give details on what the split will look like for the two businesses.

EBay has shuffled its top management; Mr. Donahoe will step down as chief executive. Devin Wenig, who has led eBay Marketplaces for the past three years, will be the chief executive of that business. Dan Schulman, a former American Express executive, will lead PayPal after the split.

With the separation, the company is also cutting 2,400 positions, or 7 percent of its global work force. EBay has also said it would explore a sale or a possible initial public offering of eBay Enterprise, the warehouse and logistics unit for third-party sellers.

A split may leave the marketplace business particularly vulnerable. For months, executives have pointed to problems with Google’s search algorithms and fallout from a huge security breach as reasons for weak e-commerce momentum. Analysts are eager to see positive results.

“The marketplace business has been struggling for the last four or five quarters,” said Mark Mahaney, an analyst at RBC Capital Markets. “What are some of the initiatives to reinvigorate growth?”

Part of the challenge for the company, which helped pioneer e-commerce, is how it can stay current as an online destination as companies like Amazon, Apple and the Asian retail giant Alibaba continue crowding the field.

PayPal is still growing, fueled by high-performing assets like Braintree and Venmo, which are mobile-focused payments divisions that eBay acquired in recent years. Venmo, Mr. Donahoe has said, is enormously popular with young audiences. Braintree is angling to reinvent PayPal’s payments business to be easier to use on mobile devices.

But there is wariness that such growth will not come soon enough, especially as large companies like Apple, as well as payments start-ups like Stripe and Adyen, continue to gain market share.

“PayPal’s payments growth has been consistent for years,” said Robert Peck, an analyst at SunTrust Robinson Humphrey. “But will that start to crack?”\

nytimes.com

[Glenn Petersen] EBay, PayPal Offer New Details About Split EBay agrees not to create payment sy...

Glenn Petersen — 4/10/2015 1:19:28 AM

EBay, PayPal Offer New Details About Split

EBay agrees not to create payment system under five-year agreement

By Greg Bensinger
Wall Street Journal
Updated April 9, 2015 5:56 p.m. ET

Even after splitting up later this year, eBay Inc. EBAY -0.18 % and payments unit PayPal will be joined at the hip.

EBay has agreed to ensure that roughly 80% of gross merchandise sales on its online marketplace are routed through PayPal for the next five years, as they are today. If PayPal’s share dips below that level, eBay will have to pay its former subsidiary restitution.

For its part, PayPal has agreed to pay eBay a commission if its percentage of sales on the marketplace rise above that mark.

The payment arrangement is among the details that emerged Thursday in a securities filing from eBay as it prepares to cleave off PayPal in the second half of the year. The filing didn't offer any additional details on the split’s possible timing.

The operating agreement will preserve for six years, including a one-year transition period, a relationship much as it was before the split.

EBay Chief Executive John Donahoe, who will leave his post and become chairman of PayPal, said the accord is designed to give both firms flexibility. For example, he said either company can negotiate joint ventures with other firms without approval from its former partner.

“PayPal is free to pursue any merchant, to pursue an Amazon, an Alibaba,” said Mr. Donahoe in an interview. “And eBay is free to bring other payment alternatives onto eBay.”

Under pressure from activist investor Carl Icahn, eBay last year said it would spin off PayPal to create two independent, publicly traded companies. EBay’s separation plan will require approval from the U.S. Securities and Exchange Commission, which Mr. Donahoe said he expected.

The agreement forbids eBay from creating its own payments system, and PayPal from developing a marketplace for selling merchandise.

EBay Chief Financial Officer Bob Swan also will step down after the split, though he’ll join the eBay board. EBay founder Pierre Omidyar will have a board seat on both companies. EBay director Tom Tierney, a former Bain & Co. CEO, is set to become chairman.

The 54-year-old Mr. Donahoe, also a former Bain & Co. executive, said he had not determined what he would do after he steps down as CEO.

EBay and PayPal will pay one another $13 million per year for each percentage point above or below the 80% threshold that PayPal’s share of payments rises or falls, according to the filing. If PayPal’s share falls below 75%, eBay will pay at a rate of $50 million per year for each additional percentage point.

EBay generates more profit, but it is growing more slowly than PayPal and faces continued threats from e-commerce giants Amazon.com Inc. AMZN 0.61 % and Alibaba Group Holding Ltd. BABA 0.88 % It also will have to overcome a continuing problem with Google Inc.’s search algorithm that pushes Web-users to other sites.

Meanwhile, PayPal has been on a pace to overtake the eBay marketplace unit by sales and with more than 160 million active accounts, has a considerable lead over upstarts like Square Inc.

EBay is cutting about 2,400 jobs this year in anticipation of the split and announced a plan to seek a buyer for eBay Enterprise unit, which helps other companies with their online sales efforts.

Write to Greg Bensinger at greg.bensinger@wsj.com

wsj.com

[JakeStraw] Pressure is on: eBay needs to deliver after PayPal's spin-off cnet.com The spli...

JakeStraw — 10/1/2014 12:15:20 PM

Pressure is on: eBay needs to deliver after PayPal's spin-off
cnet.com

The split is a logical progression for PayPal, but eBay needs to show that it's also a smart decision for its core e-commerce business as Amazon lures away sellers.

[Ahda] The company today announced that well-regarded American Express exec Dan Schulma...

Ahda — 9/30/2014 2:29:19 PM

The company today announced that well-regarded American Express exec Dan Schulman is taking over as PayPal’s president and eventual CEO, which allows the company to stabilize the executive ranks and put to rest that concern

I do not know if it is pertinent or not but I believe Costco will no longer be using American Express.

[Glenn Petersen] What the eBay Split Means for PayPal By Jason Del Rey Re/code September 30, 201...

Glenn Petersen — 9/30/2014 2:16:07 PM

What the eBay Split Means for PayPal

By Jason Del Rey
Re/code
September 30, 2014, 4:03 AM PDT

PayPal hasn’t aged so gracefully, but eBay’s decision to spin it off next year could give it renewed life.

There are plenty of questions remaining about the plan eBay announced on Tuesday morning to remake PayPal as its own public company, but one thing seems likely: It’ll improve hiring and fortify the company amid a recent onslaught of competition from startups such as Stripe and even tech behemoths like Apple.

One big concern before eBay’s decision to spin off PayPal was that eBay wouldn’t be able to find a top replacement for former PayPal President David Marcus, without a guarantee of eventual independence for the company. The company today announced that well-regarded American Express exec Dan Schulman is taking over as PayPal’s president and eventual CEO, which allows the company to stabilize the executive ranks and put to rest that concern.

It’s not clear if Schulman would have taken the job without a promise of future independence, but industry sources have previously told Re/code that several potential candidates wouldn’t have.

The hiring dilemma also extends down into the rank and file. Based on conversations with people who work in the payments game, PayPal rarely ranks at the top of wish lists that top talent wants to work for, despite generating $6.6 billion in revenue last year and growing at a rate of 20 percent annually. Part of the reason is that after 12 years as an eBay subsidiary, PayPal is no longer seen as an innovator.

EBay has a history of attempting to acquire its way into a solution to the hiring problem. It bought Marcus’s startup Zong in 2011, and late last year it spent $800 million on Braintree, a popular payments platform for mobile apps that came with a talented team.

But an independent PayPal can presumably come up with its own solutions. As a public company, it will be able to issue its own stock to help attract potential hires and retain its best employees. Having a direct voice in the company’s governance will also help it attract top leadership.

All of this is more critical now than ever with fierce competition approaching from all sides. Apple Pay is a serious threat to PayPal in mobile apps, and will be increasingly so if Apple decides to extend its payment option to regular websites.

Stripe, a payments processing startup that competes head to head with Braintree, has signed big partnerships with Twitter, Facebook and Alipay. Then there’s Amazon, whose low-priced entrance into the credit card reader space adds another serious competitor in addition to Square to PayPal’s already shaky brick-and-mortar initiatives. Google, too, still has the deep pockets to make a big payments play despite executive turnover and more failures than successes in the space so far.

While a split from eBay could help with a lot of this, big questions still remain. If PayPal is going to keep its spot as the backbone of eBay’s marketplace, the two companies are going to have to ink an arm’s-length agreement that works for both. PayPal may have to pay for the privilege, as other companies do, to get its payments buttons on e-commerce sites. It’s not clear how expensive that deal will be, but the relationship is an important one. EBay’s marketplace is responsible for more than 30 percent of PayPal’s revenue and more than 50 percent of its profits, as eBay was happy to point out when it was battling activist investor Carl Icahn earlier this year.

The move could also make PayPal a takeover target, with Google often brought up as a possible buyer. It may now get its chance.

Either way, the split from eBay should give PayPal something it hasn’t had in a very long time: The freedom to choose its own path.

recode.net

[Glenn Petersen] A split probably puts both companies into play: Message 29735786

Glenn Petersen — 9/30/2014 1:21:18 PM

[Sr K] finance.yahoo.com investor.ebayinc.com

Sr K — 9/30/2014 7:40:30 AM

[Sr K] Peter Thiel implies PayPal priced, and sold to eBay with monopolist pricing, whi...

Sr K — 9/15/2014 2:11:56 AM

Peter Thiel implies PayPal priced, and sold to eBay with monopolist pricing, which could not last.

I read
online.wsj.com

as negative for eBay.

And negative for what Stanford teaches, or Thiel skipped too many classes.

[Glenn Petersen] Why Apple Pay Will Hurt PayPal By Jason Del Rey Re/code September 10, 2014, 2:5...

Glenn Petersen — 9/10/2014 6:18:31 PM

Why Apple Pay Will Hurt PayPal

By Jason Del Rey
Re/code
September 10, 2014, 2:55 PM PDT

Apple’s new payment system hopes to change the way people make purchases both in stores and in apps, and that could mean a big problem for the Web’s biggest digital payment network, PayPal.

In addition to allowing people to pay in stores, Apple Pay will also let owners of the newest iPhones buy things within participating apps by using the credit or debit card they have on file with iTunes or the App Store. This means they don’t have to go through the annoying process of typing in payment information on small screens. Here are a few main reasons why the success of this product could damage PayPal in the long run:

1. Apple published an initial list of six “highly recommended” payments partners, which included Stripe and First Data. These partners will help work with their customers to get Apple Pay buttons onto the checkout pages of apps. Guess who’s not on the list? Braintree, which is PayPal’s new payments processing unit for mobile apps.

Braintree later announced that it will let apps running on its platform integrate with Apple Pay. How would that work? Basically, an app merchant that already uses Braintree for payment processing or other payments services could use it to process payments made using Apple Pay. That could mean a consumer could see both an Apple Pay button and a PayPal button when he or she wants to buy something. In either case, PayPal (via Braintree) will get paid something, but typically won’t earn as much profit if the consumer clicks the Apple Pay button.

2. PayPal’s Braintree owns Venmo, a consumer app that allows people to send money to each other. Consumers who have Venmo or PayPal’s app can use PayPal’s “one-touch” payments system to pay in apps. But that means signing up for Venmo or PayPal and downloading one of the apps. Compare that to Apple Pay, which doesn’t require new sign-ups or downloads.

In an interview with Re/code, Braintree CEO Bill Ready made the case that people sign up for PayPal and Venmo for other reasons, such as to make purchases on eBay or send money to friends, not just to make one-touch payments. He also made the case that the one-touch button works on other mobile operating systems, such as Android. Valid points. But it’s reasonable to believe that as more iPhone users use Apple Pay to buy stuff in apps, one subset of potential new PayPal or Venmo customers will have one less reason to download those apps.

Of course, an app maker could also allow for both Apple Pay and PayPal buttons, to make it that much easier for a person to buy. Apple wants the relationship with the customer. So do PayPal and Venmo. On Apple’s devices, who would you bet on?

3. PayPal is now battling both Apple and Google for real estate on the checkout pages of mobile apps. PayPal has history on its side, but Apple and Google arguably have greater affection from consumers. If payment buttons from Apple and Google proliferate, PayPal’s own one-touch payment button suffers. PayPal and Braintree see that button as a way to convince app makers to use their system. But that system has lost its unique place within the world of app payments with Apple Pay coming into the picture.

4. PayPal generally makes more money when customers link their bank account directly to PayPal. With fewer middlemen, PayPal makes more profit from each transaction. PayPal’s Braintree unit said it will also process Apple Pay purchases should a merchant want that option (see Point 1 above). PayPal still wins, right? Not exactly. It will still get some processing or related payments fees, since Braintree, which it owns, is working the back end of that purchase, but they’re earning less profit since Apple Pay is linked only to a person’s credit or debit card, not his or her bank.

When it comes to e-commerce, Apple Pay can have an impact on PayPal just focusing on app payments as it is now. If it extends Apple Pay into the mobile Web, things could get even worse.

recode.net

[Glenn Petersen] EBay considering PayPal spinoff - report Thu Aug 21, 2014 6:07pm BST (Reuters...

Glenn Petersen — 8/21/2014 5:30:35 PM

EBay considering PayPal spinoff - report

Thu Aug 21, 2014 6:07pm BST

(Reuters) - EBay Inc is considering a spinoff of PayPal, its fast-growing payments unit, as soon as next year, tech news website The Information reported, citing sources.

Shares of the online retailer jumped nearly 4 percent to $55.48 at midday.

EBay told potential candidates for the position of PayPal chief executive officer, a post that David Marcus vacated in June, about a possible spinoff of the payments unit, the website reported. Marcus is now a Facebook Inc executive. ( bit.ly/YEbKMj)

A PayPal spinoff would mark an about-face for the company. EBay CEO John Donahoe has resisted demands by activist investor Carl Icahn to hive off the payments service, saying PayPal was integral to eBay's business - and vice versa - and a split would not make sense.

"The board will continue to assess all alternatives to create that long-term value and to enhance the growth and competitive positions of both eBay and PayPal. This position has not changed," eBay spokeswoman Amanda Miller said.

Whether eBay has decided to spin off all or part of PayPal, and what structure that could take, remained unclear, The Information reported.

Icahn eventually backed off from his demand in April, saying that while he supported a PayPal split in the near future, now was not the time. Some investors, however, feel an independent PayPal can grow by attracting online retailers wary of rival eBay.

(Reporting by Supantha Mukherjee and Edwin Chan; Editing by Rodney Joyce and Jeffrey Benkoe)

uk.reuters.com

[Sr K] Why did eBay take so long to send today's email? 5/28/2014 IMPORTANT: PASSWOR...

Sr K — 5/28/2014 6:00:48 PM

Why did eBay take so long to send today's email?

5/28/2014

IMPORTANT: PASSWORD UPDATE

Dear eBay Member,

To help ensure customers' trust and security on eBay, I am asking all eBay users to change their passwords.

Here's why: Recently, our company discovered a cyberattack on our corporate information network. This attack compromised a database containing eBay user passwords.

What's important for you to know: We have no evidence that your financial information was accessed or compromised. And your password was encrypted.

What I ask of you:
Go to eBay and change your password. If you changed your password on May 21 or later, we do not need you to take any additional action at this time.

Changing your password may be inconvenient. I realize that. We are doing everything we can to protect your data and changing your password is an extra precautionary step, in addition to the other security measures we have in place.

If you have only visited eBay as a guest user, we do not have a password on file.

If you used the same eBay password on any other site, I encourage you to change your password on those sites too. And if you are a PayPal user, we have no evidence that this attack affected your PayPal account or any PayPal financial information, which is encrypted and stored on a separate secure network.

Here are other steps we are taking:
As always, we have strong protections in place for both buyers and sellers in the event of any unauthorized activity on your account.We are applying additional security to protect our customers.We are working with law enforcement and leading security experts to aggressively investigate the matter.

Here's what we know: This attack occurred between late February and early March and resulted in unauthorized access to a database of eBay users that includes customers' name, encrypted password, email address, physical address, phone number and date of birth.

However, the file did not contain financial information. And, after conducting extensive testing and analysis of our systems, we have no evidence that any customer financial or credit card information was involved. We also have no indication of a significant spike in fraudulent activity on our site.

We apologize for any inconvenience or concern that this situation may cause you. As a global marketplace, nothing is more important to eBay than the security and trust of our customers. We know our customers have high expectations of us, and we are committed to ensuring a safe and secure online experience for you on any connected device.

Devin Wenig
President, eBay Marketplaces

[JakeStraw] eBay Arrives in Latin America finance.yahoo.com Shoppers in South...

JakeStraw — 5/16/2014 10:36:29 AM

eBay Arrives in Latin America
finance.yahoo.com

Shoppers in South America – as well as Central America – can now shop eBay in Spanish and Portuguese, view local currencies, and connect to the world’s inventory in more relevant, personalized ways

More than 2 million people in Latin America already shop eBay in English and U.S. dollars. Now, when these customers visit eBay, they will see localized shopping experiences in Spanish or Portuguese – online and on eBay mobile. This is the first time eBay has offered in-language, tailored experiences to consumers in Latin America, and shoppers will be able to:

Search, browse and experience a world of selection and great value for the items they need and love … in their preferred language
View local promotions and deals tailored specifically to their markets
See local currencies
And shop confidently with the knowledge that eBay has them covered

“Over the past year, eBay has started to build a presence in Latin America, partnering with PayPal on a variety of efforts, and understanding what matters most to shoppers in the region,” said Wendy Jones, vice president of global expansion and cross border trade for eBay. “Latin America is one of the fastest-growing commerce markets, and we are innovating the eBay experience for our customers there, delivering more relevant, engaging experiences – in their local language and currency – to better enable them to shop the world.”

The launch of a localized eBay in Latin America marks the next step in the company’s ambitious, multi-year journey to accelerate geographic expansion and cross-border trade in BRIC and emerging markets. In 2012, eBay launched the first of its localized experiences in Russia, the eBay Moda fashion mobile app, which was translated into Russian with currency conversion in rubles. In April 2013, eBay launched the Russian version of eBay.com, enabling Russian consumers to access eBay’s global inventory of more than 250 million listings in their local language and currency. And, in September 2013, eBay rolled out the first of its localized experiences in Latin America, with the Portuguese-language eBay Moda fashion mobile app.

To capitalize on projected smart phone growth, and ensure consumers in Latin America are able to shop at the moment inspiration strikes, eBay also announced the launch of its core eBay mobile app in Brazilian Portuguese. The eBay mobile app has been available in Spanish for some time, and is now available in seven languages around the world.

In addition, eBay’s global shipping program recently expanded to Brazil, helping meet the expectations of consumers there for fast, reliable and cost-effective shipping, The program, already available to Mexico and 52 other countries around the world, makes an international purchase feel more like a domestic transaction. When eBay customers in Mexico or Brazil purchase an item from a merchant in the U.S. who is enrolled in the program, they will see and pay the all-in cost of the item, including taxes and duties. GSP aims to eliminate the surprises that can occur in international ecommerce.

The launch of eBay in Latin America represents a continued commitment to connect shoppers in Central and South America to the things they need and love, and to deliver the selection, value and experiences that consumers expect.

[Glenn Petersen] A success story that got its start on eBay: Message 29537882

Glenn Petersen — 5/15/2014 10:28:49 PM

[Glenn Petersen] Is a tempting acquisition behind eBay’s costly patriotism? By Tim Fernholz ...

Glenn Petersen — 4/30/2014 1:26:10 PM

Is a tempting acquisition behind eBay’s costly patriotism?

By Tim Fernholz @ timfernholz
Quartz
April 30, 2014

EBay is making an interesting decision for an American multinational company: It’s thinking about paying its taxes.

The online marketplace and payments pioneer told investors yesterday that it expected a $3-billion charge on its books for taxes that will come due when it brings some $9 billion in untaxed overseas revenues back to the United States. Some analysts were surprised: Companies from Apple to Verizon have found ways to repatriate their cash without paying taxes on it, typically by borrowing against it; and even eBay has done that before. While interest rates have been rising, they’re still lower than the statutory rate on US corporate income.

The company says it is bringing back the revenue to invest in its US operations and potentially in an acquisition. While CEO John Donahue was cagey on the conference call, he laid out two potential criteria while emphasizing an interest in mobile: “Ways to extend our business platforms”—like the company’s acquisition of StubHub in 2007—and “more capability acquisitions, where we’re buying a technology or buying a management team”—like the purchase of the mobile-payments start-up Zong in 2011.

Obviously, that leaves a lot of options on the table, but we’d just note with a wink that major mobile payments competitor Square is reportedly low on cash, looking for acquirers and worth a few billion dollars.
\
\But why would eBay choose to pay taxes when it could avoid them? Here are a couple of reasons:

The company may want to move more quickly in an acquisition than it could if it needed a bank to underwrite and finalize a multi-billion-dollar bond deal. Or, the hassle of hiring all those lawyers and bankers may not seem worth the distraction from eBay’s central business (companies issuing bonds to avoid paying tax have typically done so for much larger amounts and keep more cash overseas). And don’t forget, eBay could easily reverse this charge next quarter if it decides not to bring the cash back.

Maybe the decision is an additional finger in the eye of Carl Icahn, the activist investor who feuded with eBay’s management over the company’s structure. Rather than spin off its PayPal online payments unit or increase its share buy-back with foreign cash, as Apple did, eBay is forking the cash over to Uncle Sam.

Or, maybe the company’s executives realize that the corporate income tax is unlikely to be cut by Congress anytime soon, so it’s better to put the money to work and take the tax hit now, rather than watch it accumulate overseas in the years and decades ahead, with ever-larger tax payments looming.

qz.com

[Glenn Petersen] Icahn May Someday Win, and eBay Will Spin Off PayPal By ROBERT CYRAN DealBook ...

Glenn Petersen — 4/10/2014 3:23:48 PM

Icahn May Someday Win, and eBay Will Spin Off PayPal

By ROBERT CYRAN
DealBook
New York Times
April 10, 2014, 2:48 pm

Carl C. Icahn has lost the battle of bluster at eBay. The activist investor is quitting his proxy fight now that the company is appointing one new director and agreeing to talk to him. Considering that Mr. Icahn had “never seen worse governance” and was broadly right about the benefits of eBay separating its PayPal unit, that’s a retreat. But he may yet win the war.

Mr. Icahn went in hard, pulling no punches with his allegations of conflicts of interest on the part of some eBay board members. One was Mark Andreessen, whose venture capital firm’s participation in the $2.75 billion buyout of Skype from eBay carried the tang of conflict — although the company and Mr. Andreessen said that such matters were handled appropriately.

More important, Mr. Icahn’s push for a spinoff of PayPal makes financial sense, as Breakingviews has argued over the years. Though some of the online payment unit’s new customers come via eBay’s auction business, an increasing majority originates from outside its walls. Separating the two — perhaps partially to begin with — could boost PayPal’s growth prospects and its value.

The company came out swinging, too. Pierre Omidyar, eBay’s founder and holder of a stake almost four times larger than Mr. Icahn’s 2 percent, said the advocate’s attacks were misleading. The company pointed to PayPal’s 40-fold growth in mobile payments over the last three years as evidence that eBay’s ownership helped rather than hindered the business.

Mr. Andreessen also counterattacked almost daily on Twitter. In one instance, he pointed out that in connection with a different situation Mr. Icahn had said conflicts of interest were endemic in technology and health care boardrooms and easily managed through recusal.

The appointment of David Dorman, currently chairman of CVS Caremark, as another independent director at eBay and the promise by eBay’s chief executive John Donahoe to talk to Mr. Icahn are small reward considering the gravity of the investor’s allegations. But Mr. Icahn says he will continue to press for the spinoff of PayPal.

The company doesn’t believe now is the time, but has not ruled it out forever. More talk from Mr. Icahn — albeit behind closed doors — and heightened scrutiny from independent board members and shareholders could bring the day closer.

Robert Cyran is a columnist for Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

dealbook.nytimes.com

[Glenn Petersen] EBay, Icahn settle proxy fight Associated Press ...

Glenn Petersen — 4/10/2014 10:31:04 AM

EBay, Icahn settle proxy fight

Associated Press AP
April 10, 2014, 6:41 a.m.

Carl Icahn is backing down from his push to remake eBay, settling an acrimonious dispute just ahead of what promised to be an awkward annual shareholders meeting.

The e-commerce company has been fighting a push from the activist investor to spin off PayPal, eBay's mobile payment business that is growing revenue faster than the rest of the company. Icahn launched his campaign against the company in January.

Under a deal announced Thursday, Icahn — whose has a minority stake in eBay — is dropping the PayPal strategy and withdrawing his proposal to put two nominees on the board.

In turn, eBay will make David Dorman an independent director, the 10th of the 12-member board. The 60-year-old Dorman is chairman of CVS Caremark Corp. and founding partner of Centerview Capital Technology.

Icahn still believes eBay should be spun off and said in a statement that he'll seek confidential talks with the company, whose leadership Icahn has labeled as "either incompetent or negligent."

Icahn said he and eBay President and CEO John Donahoe have agreed to meet regularly when Donahoe is in New York to talk about eBay's strategic options.

Donahoe, in an interview with CNBC early Thursday, brushed of the harsh criticism from Icahn that had been directly leveled at him.

"I haven't been paying a lot of attention to the back and forth," he told the business network.

Icahn signed a confidentiality agreement that covers any non-public information that board members and certain company executives may share with him. And eBay will not put into place a policy that would prevent those individuals from speaking with Icahn.

The annual meeting for EBay, based in San Jose, Calif., takes place on May 13.

Shares fell 74 cents to $55.15 before the opening bell.

latimes.com

[JakeStraw] Google-eBay merger suggested as alternative to PayPal spinoff news.investors.com

JakeStraw — 3/19/2014 10:46:06 AM

[Sr K] EBAY hit an all-time high Friday and AT closing high today. But I side with Icah...

Sr K — 3/5/2014 8:08:04 PM

EBAY hit an all-time high Friday and AT closing high today. But I side with Icahn.

"As competition in the payments sector intensifies, profit margins on all payments systems will likely start trending to zero." (That's what Hoffman said)

That is reasonably likely. Technology changes fast, and no matter what impermanent advantages PayPal has today, there are participants gunning for them. For a nearly-automated system, PayPal charges too much. There's no reason for them to charge credit card type fees when there is no float.

When they charge 1.3%, EBAY will fall 20%.

So I expect volatility and a downtrend and potentially a declining business model that will have to be replaced.

eBay will likely not be as flexible as entrepreneurs, and they will be committed to an entrenched system. Amazon and Apple and Google, mentioned by Reid Hoffman, would only be the start. There's no information or inadequate information to show a customer that PayPal is secure and the customer's information is secure. I trust numerous other participants so much more than eBay, which as the parent, is still a marketing and dot.com company. I avoid using PayPal.

Where are PayPal's servers? Have they ever been hacked?

[Glenn Petersen] Short-term Profit Taking vs. Long-term Value Creation: The Future of PayPal Rei...

Glenn Petersen — 3/5/2014 6:21:36 PM

Short-term Profit Taking vs. Long-term Value Creation: The Future of PayPal

Reid Hoffman
March 05, 2014

In January, activist investor Carl Icahn acquired around 2 percent of eBay’s stock. A month or so later, eager for a return on his investment, he published an open letter to eBay’s shareholders.

In it, he expresses concerns about the "long-term value" of the eBay subsidiary PayPal, and its ability to “remain competitive over the long term.” His solution: Spin off the fast-growing payments processor as a standalone enterprise.

While Icahn mentions long-term shareholder value no less than seven times in his letter, his perspective on PayPal seemed far more focused on the short term when he spoke with Forbes a couple weeks ago.

"If you just went out and took it public you’d get a huge premium because of growth…" Icahn told writer Steven Bertoni. "PayPal is a jewel, and eBay is covering up its value."

According to Bertoni, Icahn would like to see eBay sell PayPal to a company with "a more natural fit," such as Visa. "Another giant in the space would pay a huge premium for PayPal," Icahn enthused.

But if we assume that Icahn really does care about creating long-term stockholder value, as he insists, then the true issue here isn’t what sort of short-term pop he can engineer for eBay’s stock price, or what size premium PayPal might fetch from another company.

The true issue is what conditions are most conducive to PayPal growing increasingly valuable over, say, a 10-year time frame. I’ve been interested in this question ever since I served on PayPal’s founding board of directors.

So, what conditions will best help PayPal continue to grow its user base, increase revenues, and bolster its profit margins on a consistent and ongoing basis? Those are the long-term trends that are going to create real value for committed eBay shareholders.

The Innovation Culture of Silicon Valley

To me, what’s most interesting about this story is the light it sheds on the clash of values between Icahn’s Wall Street world and the culture of Silicon Valley.

In the popular imagination, Silicon Valley is mythologized as a place where entrepreneurs who are barely old enough to vote conjure a few thousand lines of code into billion-dollar companies in a matter of months.

But instances where this actually happens are rarer than total solar eclipses. The reality of Silicon Valley is that innovation takes time. The fabled Eureka moments may lead to product breakthroughs. But they rarely lead to fully formed products, and they never lead to mature and fully formed businesses.

Innovation comes from long-term thinking and iterative execution.

The prototypical Silicon Valley venture capital approach to investing is structured around the pace that start-ups evolve. VCs think in terms of five-to-ten year development cycles, not quarterly earnings reports, as they break out funding opportunities into Series A rounds, Series B rounds, Series C rounds, etc. Liquidity is typically seven to ten years down the line.

Strong platforms take years to realize their full potential. They often provide opportunities to cash out early along the way -- but for those who are patient and more interested in long-term value creation, their rewards are even sweeter. Just ask Facebook’s Mark Zuckerberg. Or Workday founders Aneel Bhusri and Dave Duffield.

While PayPal is no longer a startup, it still has massive growth prospects. But to someone who isn’t investing in the long term, it’s just a cash cow that’s ready to be slaughtered.

That’s why Carl Icahn is churning out letters to shareholders so fast he actually rechristened ex-PayPal COO and Yammer founder David Sacks as “David Yammer” in his first missive. It’s hard to imagine he could have a coherent long-term plan given that his due diligence doesn’t extend to surnames. (It's since been corrected.)

Icahn is determined to manufacture consent for a spin-off, then a sale, so he can make a quick profit on that PayPal premium.

If you believe that it takes more than a few caustic letters to shareholders and a quick trade to deliver compounding returns to investors over time, Icahn’s argument loses much of its zing.

After all, long-term value usually results from long-term strategies crafted and executed by a strong leadership team. eBay CEO John Donahoe has lifted the company’s annual revenues from $8.54 billion in 2008, when he took over, to $16.05 billion in 2013. David Marcus, PayPal’s president, is an accomplished entrepreneur who is deftly bringing PayPal into new markets.

Both of them have extensive knowledge of the commerce and payments landscape, and both of them agree that keeping PayPal and eBay together is the best way to create long-term value for both companies. They’ve considered spinning off PayPal, and they have determined that the current setup is the most strategic one.

I don’t have any inside information about their vision, but I do have some thoughts about why the PayPal/eBay combination works as is.

The Future of Payments

The payments space is extremely competitive right now. Amazon, Google, Apple, and Square all want to own it. And none of them are playing with each other. Instead, they’re all deploying whatever strategic assets they have to create their own closed commerce-and-payments systems.

In other words, while Carl Icahn is insisting that eBay and PayPal are two “disparate businesses” with “two very different business platforms” that should separate in order to improve their effectiveness, everyone else in the space is converging as furiously as they can.

Amazon is a commerce platform with its own payments system. Google has a commerce platform and a payments system. Apple has the capacity to leverage its commerce platforms (iTunes, App Store) and its hardware into a closed-loop commerce system that would let users pay for online and offline purchases using their iPhones. Square has allied with Starbucks because it needs large commerce partners to feed it transactions to process.

Any one of these payments system players would likely jump at the chance to add to one of the world’s largest decentralized commerce platforms to their strategic assets.

They can’t, however, because PayPal did that 12 years ago, when it sold itself to eBay.

At the time, I was working as PayPal’s Executive Vice President and helped engineer that deal. We had taken PayPal public earlier that year and had plenty of capital, but we felt that joining eBay would be advantageous for long-term innovation. There were massive synergies between eBay’s peer-to-peer marketplace and PayPal’s easy-to-use payments mechanism. Working as a team, we could share data and analytics about customer acquisition and fraud activity, we could grow our user base faster and less expensively, and we could create higher profit margins in a marketplace where a huge number of higher value transactions would be taking place on a consistent basis.

Twelve years later, the synergies that led to our deal with eBay are no less relevant. Today, 30 percent of PayPal’s $180 billion in annual transactions take place on eBay. 30 percent of its new users come from eBay. Its profit margins are higher here than they are in less established parts of its business.

Thanks to its mature and lucrative eBay business, PayPal has the ability to keep its margins as low as possible in the areas where it is undertaking its greatest expansion efforts – namely mobile payments and retail payments. And as evidence from the last couple of years suggest, this relationship is allowing PayPal to innovate in dynamic and abundant fashion. Last year, it launched 58 new global product experiences. Its mobile business has grown from $14 billion in 2012 to $27 billion in 2013. It has signed up approximately two million physical retail locations that accept PayPal as a form of payment.

As competition in the payments sector intensifies, profit margins on all payments systems will likely start trending to zero. As that happens, controlling major commerce platforms will become even more important to payments players, because they’ll still be able to create value by building valuable ecosystems on top of them.

Building Shareholder Value With a Competent Board of Directors

As Carl Icahn correctly asserts, companies do need to be responsive to their shareholders. Sometimes, activist investors can help spur constructive action against CEOs and boards who have been mis-managing a company’s long-term innovation efforts. That isn’t the case with PayPal.

Instead of providing a compelling explanation for why PayPal would be better off diverging from eBay at precisely the moment when everyone else in the payments industry is looking for convergence opportunities, Icahn has invested energy into attacking the integrity of eBay board members Marc Andreessen and Scott Cook, and the leadership abilities of eBay CEO John Donahoe. In a series of letters, he has insisted Marc Andreessen bulldozed the rest of the board of directors and unilaterally orchestrated a transfer of Skype to Microsoft that benefited Andreessen’s own firm to the detriment of eBay. Ichan should know better; these types of decisions are made by the entire board of directors.

While this has made for lively if unconvincing theater -- in Icahn’s imagination, Andreessen has almost Lex Luthor-like powers to control the minds of others -- it doesn’t qualify as a long-term strategy.

Instead, it’s classic market exploitation. And while market exploitation can lead to a quick buck in a quick trade, it creates less value over time than more fundamental approaches that rely on strong leaders executing carefully considered plans to build lasting assets.

In the end, Icahn’s stock in trade is trading stocks. Silicon Valley’s stock in trade is creating powerful products and platforms. The former approach creates short-term returns. The latter approach creates economically productive ecosystems that spawn industries, jobs, products, and services that benefit society at large, and compounding profits for long-term shareholders.

linkedin.com

[Glenn Petersen] Icahn says demanding review of eBay records By Sam Forgione NEW YORK ...

Glenn Petersen — 3/3/2014 2:07:43 PM

Icahn says demanding review of eBay records

By Sam Forgione
NEW YORK
Mon Mar 3, 2014 1:33pm EST

NEW YORK (Reuters) - Activist investor Carl Icahn said Monday he is demanding a review of eBay Inc.'s records on its divestiture of Skype, reiterating his view that eBay board member Marc Andreessen had conflicts of interest regarding the sale, while eBay called Icahn's criticisms "false and misleading."

In an open letter to shareholders, Icahn said "Mr. Andreessen's conflicts are clear and insurmountable." He also said his firm is "in the process of demanding an inspection of eBay's relevant books and records pursuant to our right as stockholders under Delaware law."

Icahn, who has a 2.15 percent stake in eBay and has called for the e-commerce giant to spin off its fast-growing PayPal payments business, has publicly feuded with the company in recent weeks over eBay's 2009 sale of a majority stake in Skype to private investors.

Icahn says that Andreessen, whose venture capital firm was one of the investors in the group to which eBay sold its majority stake in Skype for $1.9 billion, subsequently benefited from the group's sale of the online phone service in 2011 to Microsoft for $8.5 billion.

Icahn said in a letter on February 24 that, as a board member, Andreessen had been exposed to nonpublic eBay information while investing in and advising five eBay competitors.

"In response to false and misleading information being disseminated by an activist shareholder about the company's 2009 divestiture of Skype, eBay Inc. today reiterated previously disclosed public information," eBay said Monday in a statement in which it summarized the process of the sale.

Andreessen said that he had disqualified himself from participating in the eBay board's divestiture of Skype, and said, "I do not serve on the board of any company with any significant competitive overlap with eBay."

Icahn, who is known for taking large stakes in companies and pushing for management change, was not immediately available for comment.

Icahn is chairman of investment firm Icahn Enterprises L.P.. Icahn Enterprises reported fourth-quarter revenue of $4.9 billion and $20.7 billion in revenues for all of 2013, marking increases from the previous periods.

Icahn's investment firm earned a 31 percent return last year, he said in a letter on Monday. That more than quadrupled the performance of the average hedge fund, which rose roughly 6.5 percent, according to data from Hedge Fund Research.

(Reporting by Sam Forgione; Editing by Dan Grebler)

reuters.com