As Ebay has moved to attract bigger sellers and more fixed-price listings better to compete with Amazon, critics say the e-commerce titan has abandoned the small auctioneers that fuelled its early growth.
John Donahoe has worked to reverse that perception since he took over as chief executive almost two years ago — seeking to woo back the basement auctioneers, even as he keeps the big sellers happy.
On Tuesday Ebay made changes to its already complicated pricing structure it says will reduce seller fees and spur new activity on the site. But the changes also include higher commissions for Ebay on some transactions, while pressuring high-volume sellers to sign up for new monthly fees.
For a company of its size, Ebay has a surprisingly small footprint in the real world. While it enjoys a sprawling campus in Silicon Valley, it doesn’t have brick and mortar stores to staff, or the vast warehouses maintained by rival Amazon.
So in an effort to put a face on the company for the holidays, Ebay has sent a “mobile boutique” touring around the country. The first-time effort was on display in San Francisco today, and will be in Los Angeles later this week.
A souped-up trailer swarming with Ebay employees in leprechaun green shirts, the boutique has hundreds of the most sought-after products on display.
Ebay is betting big on mobile shopping. Last month we revealed what a hit the Ebay iPhone app already had proved — ringing up $400m in sales.
“More than 4.6m people have downloaded the Ebay app,” we wrote, “using it to buy not just books and clothes, but also a Lamborghini, a $150,000 boat, and a Bentley.”
Now Ebay is rolling out a suite of new and upgraded mobile offerings. In addition to a refreshed Ebay iPhone App and a updated mobile website (m.ebay.com), it is also debuting a new app called Deals.
Ebay’s attempt to offload Skype to a group of investors just got even more complicated.
Joost and Joltid, the companies owned by Skype founders Niklas Zennstrom and Janus Friis, today filed a motion for a preliminary injunction against Mike Volpi and Index Ventures, two of the players in the group seeking to buy Skype. If granted in full, the injunction would essentially ban Mr Volpi and Index from participating in the deal for the time being.
The motion is the latest move in a legal onslaught from Mr Zennstrom and Mr Friis that began even before the current deal for Skype was announced, and seems designed either to get them control of Skype or, more likely, make sure they get a piece of the action after a sale.
Part of Amazon’s success is attributable to the ease it has brought to the payments experience. Shopping on Amazon.com is made simple by Amazon storing much of a customer’s checkout information and minimising clicks, and a few years ago Amazon rolled out Checkout, which lets users on other websites pay using their Amazon credits or payments information stored on Amazon. (Amazon doesn’t reveal Checkout has been successful.)
Now Amazon has released a Mobile Payments Service. The programme will let e-commerce sites integrate the Checkout experience into sites designed for mobile phones, presenting yet another option for developers who are eager to encourage more mobile-commerce.
Listing its cars on Ebay was evidently not a novel enough gimmick to drive new sales to slumping Detroit automaker General Motors.
A month and a half after announcing their “virtual showroom”, America’s biggest automaker and biggest online auction site are calling off their partnership.
The trial was set to end on September 30, and will not be renewed. The trial programme, which let California buyers haggle with local dealers online, was heralded as a “win-win for both sides” if it worked.
But after 50 or so days, it looks as if it didn’t. The Ebay site may have attracted 1.5m hits, producing 15,000 leads for dealers. But neither Ebay nor GM would say how many cars were sold, suggesting that the results were less than stellar.
What would you pay for a fast-growing private internet company with hundreds of millions of active users and revenues of more than $500m?
If the name on the door is Facebook the answer, apparently, is: $6.5bn. That’s the valuation implied by the recent offer to Facebook employees from Digital Sky Technologies (the Russian investment firm also bought a chunk of preferred stock from Facebook that the company claimed valued it at $10bn, but that sounded like hype given that the benefits attached to those shares were not disclosed.)
So the $3.1bn $2.75bn valuation that has just been slapped on Skype sounds respectable – and is certainly more reasonable than the laughably low offers of $2bn or so that eBay was being encouraged to entertain earlier this year (curiously, eBay will not explain the difference between the $3.1bn value implied by its deal and the headline figure of $2.75bn that it claims for Skype).
When Ebay and General Motors last week announced they would partner to let California buyers haggle with dealers online, observers said the deal would be a “win-win for both sides”, if it worked.
After a week of the arrangement Ebay released some figures that suggest if the deal’s not working already, it might.
Through August 17 the new co-branded “virtual showroom” got 630,000 visits, and users performed just shy of 1m searches of GM inventory. More importantly, the company said about 2,400 new car buyers had entered into talks with dealers as a result of the promotion.
But Ebay didn’t release the most important number — how many new vehicles it has helped GM sell.
Skype’s future just got cloudier. In a regulatory filing this week, Ebay, which in 2005 acquired Skype for a final price of $3.1bn, said it might shut down the internet telephony service if it can’t resolve a legal dispute with Skype’s founders or develop an alternative technology.
The technology used to power Skype is still owned by the company’s founders, Niklas Zennstrom and Janus Friis. Their new company, Joltid, licenses the technology back to Ebay.
But Joltid has accused Ebay of violating the terms of that agreement by using parts of the code it did not license, and has threatened to withdraw the technology. Ebay has asked a British court to intervene, and the case is pending.
In this week’s filing, Ebay said that while it expects to prevail in court, it was working to develop an alternative to the Joltid technology.