As should have been predictable by anyone at eBay, their sellers are en-masse rejecting the new feedback policy whereby sellers are only able to leave positive feedback for buyers, regardless of any problems those buyers cause after paying.

Some of the suggestions coming forth in eBay’s own forums include -

1. Never leaving any feedback for any buyer on any transaction (most popular)
2. Building off-eBay specialist sites where the true feedback for buyers can be left
3. Ignoring buyer feedback received and only viewing the feedback buyers leave for sellers
4. All sellers refusing to leave feedback for buyers until feedback has been received
5. Switching all listings to BIN or SIF format with compulsory instant payment by PayPal, effectively shutting out all buyers without a PayPal account and moving the fraudulent purchase burden even more heavily onto PayPal’s revised 100% protection for PowerSellers.
6. Changing accepted payments shown in listings to postal orders and bank transfers only - thus losing eBay the revenue from PayPal

If any one or two of the above are widely adopted, it will be a major display of distrust for the management of eBay UK and eBay Global/Inc.  If it also hits the mainstream media, it will undoubtedly affect share prices, and how long will shareholders permit that?

On the UK site, Head of Trust & Safety Richard Ambrose further incensed the already agrieved sellers when he posted in forum that, “It will remain the case that most negs received by sellers are deserved - whatever sellers may claim.“  Such statements clearly display young Mr Ambrose’s disdain for the people who pay his salary. 

He added,”As I’ve made clear in most of my posts, I think sellers are making a lot of fuss over something they rarely use. …. This is a big change, I realise, but it only affects a tiny number of situations a year for most sellers. Please keep in mind the bigger goal of stopping buyers leaving the site - this will have a big positive effect on that.”

Many sellers are not experiencing “a tiny number of situations a year” for the simple reason that eBay has no procedures to handle the many problems that buyers create after payment or delivery.  In fact, although PayPal now handles eBay transaction disputes for non-delivery or not as described, even they do not have procedures for most of the more common dispute issues. 

Additionally, because most sellers clear these issues in a professional manner, eBay and PayPal never get to notice them other than the buyer not leaving any feedback at all for the seller.  Yet, the buyer’s post-payment attitude and behaviour may be exactly the reason the buyer receives non-positive feedback, but Ambrose has made it perfectly clear that eBay are not interested in such problem buyers once payment has been made and eBay have received their fees.

Once again, Ambrose, and eBay generally, have failed to recognise that sellers are buyers too, and that unlike eBay staff and most buyers, the sellers have both a significant investment in eBay working correctly, and in knowledge of when and how it works best.  If the vast majority of sellers believe this is a bad move, then eBay should be listening rather than dictating to them.

The declarations from sellers intent on leaving the site are again growing, and more rapidly after the stores fees/visibility debacle of summer 2006.  Many are now actively asking for recommendations for other sites to sell from (an action that in the past has usually resulted in them leaving eBay faster than planned due to being suspended for asking that question) and discussion board post continuity is severely disrupted as post cross referencing shows masses of missing posts - obviously deleted for what eBay classes as inappropriate content. 

The censors at LiveWorld must have been working overtime in the last 48 hours.  If 2006 is anything to go by, it will becoming increasingly worse over the next few weeks, and rival sites like eBid will reap the benefits.

Ed

Yesterday, 29th January, in a heated discussion on the eBay UK Q&A discussion board, eBay UK’s Head of Trust and Safety, Richard Ambrose, blurted out several admissions that collectively reveal a hidden agenda behind the new eBay Feedback Policy for 2008.

Ambrose, notorious with UK PowerSellers for posting in an insulting and dismissive manner (in eBay forums) regarding the concerns of eBay’s paying customers (the sellers) has previously been marked by sellers for directly lying to them in forum discussions. 

Previous such incidents include the infamous cutting of trans-Atlantic visibility last February.  Initially he posted a query thread asking who had seen traffic reductions (because “Google have changed their search criteria algorithms”), then he tried to blame it on sellers failing to regularly provide fresh content on the static pages of their eBay Shops, before finally coming clean (a month after the event) and declaring the trans-Atlantic visibility cut. 

That deception cost him an appearance on BBC TV’s Watchdog consumer affairs programme, but worse was to come.  He later admitted in forum that not only had he been privy to the decision to cut the visibility, but had been one of the instigators of it - that post has now been deleted from the eBay forums.  All this was when his role was in UK Search & Finding, at which time he announced himself as Head of Natural Search.

Another previous occasion related to the U-turn on visibility of shops in core search and browse, which for the UK was actioned in August 2006, immediately before an increase in stores listing and final value fees.  Initially Ambrose empathised with sellers, never stating he was against the move, but giving the impression of such whilst stating he had to follow the company communication rule on the issue, and support the company’s stance.

Yesterday, in response to a question by eBay seller “secretgoth“, “Can you explain, for I must be thick, just how, when a seller account is restricted, they are going to get buyers to withdraw negs? Well other than the current bribery and freebies that is. How will a mutual withdrawal work if buyers don’t have anything to withdraw? Absolutely no incentive for a buyer to withdraw feedback now so how exactly please, is a seller supposed to get the unfair (from what I’ve seen anyway)restrictions lifted?”

Ambrose replied, “There isn’t going to be a mutual feedback withdrawal process anymore, obviously. Sellers will either be able to appeal a neg to us, which we’ll remove if it’s abusive or defamatory, or initiate an Unpaid Item process - and if the buyer doesn’t respond to that, their neg will be removed.”

Screen shot - in case this post gets culled like so many of Mr Ambrose’s previous posts that admitted or said something eBay later became embarrassed about.  Click screen shot to go to he thread.

Apart from being a totally worthless response for dealing with post-payment abuse and problems from buyers (such as feedback blackmail), this is essentially saying that less than 0.0001% of unfair negatives will be removed, as most buyers know about the “abusive or defamatory” ruling, so if they want feedback to stick, they simply use clean, though unfair, comments.  As such it displays a clear and recognisable awareness  that eBay knew beforehand that the new system, arriving in a few months, would directly affect sellers’ sales, revenue, and discounts.  One therefore has to question if the new feedback rules are a deliberate policy to reduce or avoid eBay’s having to apply discounts to sellers’ invoices?

I can already hear some of the responses, even before I post this blog article, “why would eBay cut their own bottom line by doing this?”.  The simple answer is that they won’t. 

Quite apart from the genuine fee increases just announced, over time, possibly even before the next Christmas season starts, so many sellers will have been affected by the destruction of their feedback and DSR ratings, that the majority will be in the same boat of ineligibility for PowerSeller status and discounts, and suppressed visibility in search and browse.  As each “clean” set of sellers rise to the top and pick up the lions share of sales, they’ll get hammered by unreasonable buyers and trade wreckers, and fall to the bottom of the heap, then a different set will float up to receive the same treatment, and so it will cycle. 

eBay will have to keep adjusting the thresholds downwards, and the seller exodus will become a flood due to increased costs and collapsed revenues.  A lucky few will be able to stay at the top (possibly the same ones there today and who get invites to all the smooch-eBay events?) but everyone else will be picking banquet crumbs from the ditches and gutters around eBay Towers.

The new rule that Sellers can only leave positive feedback was “sort of” pre-announced last year, when eBay announced they would be taking drastic measures to curb unfair and retaliatory negative feedback, however, no-one could have predicted the move they have taken, which completely throws out one of the founding systems introduced by Pierre Omidyar at the start-up of eBay, and which even Bill Cobb acknowledged as one of the company’s growth engines, when he announced the change two days ago.  So Why change a winning formula? 

Well, Cobb explained that retaliatory negative feedback has grown four-fold since 2004 - he did not state if this was as a percentage of total, or simply a raw number.  If it was the latter, then any analyst worth their salt would retort that it was obvious that would happen given eBay’s membership growth in the last four years  as well as due to the new “less prime” markets they have moved into in that time - it’s hardly rocket science, is it?  Interestingly,  Ambrose claims that sellers leave five times more retaliatory negatives than buyers do - why the disagreement on multiples?

If it was a percentage of all feedback, then what other policy changes have eBay introduced that may have led to increased retaliatory feedback from sellers to buyers?  Ummm …. DSRs?  Increased reliance on PayPal as a source of chargebacks payment?  Seller saturation leading to slimmer pickings?  Lack of Buyer Verification and Education?  Accelerating restrictions on seller activity?  VeRO?  Generally upsetting sellers and making them less tolerant of buyer stupidity?  Increased attractiveness for fraudulent buyers to use eBay and blackmail sellers by using the systems eBay put in place?  The program to penalise P&P gougers that also battered overseas sellers already disadvantaged by location?  In reality, the answer is all of the above.  eBay created the problems by introducing change, and now they are compounding them with the latest changes.

With last August’s rule that neutrals = negative, and the introduction that if 5% or more of feedback in a month are non-positive, the seller receives selling restrictions, the opportunity for business wrecking just went into overdrive now that sellers cannot admonish (or hold in check) unreasonable buyers by using feedback - and that’s what most sellers are complaining about. 

Richard Ambrose himself, and remember he’s Head of UK Trust & Safety, admitted yesterday that he fully expects seller feedback value to drop across the board. In post #159 of this thread, he admitted,”Yes, I think we’ll see an increase in the % of feedback that is negative, but for the most part that will simply make it easier to spot bad sellers, who will accumulate many more of them.“  

In post # 275, he added, “Sellers are just scared of being negged more - which they will be.“  Well thank God he recognises that much!  But does he also recognise how this and other changes will directly reduce most sellers’ profits from eBay?  Perhaps even to the point of making eBay a co-respondent in defraudment cases?  Let’s be honest, eBay doesn’t have a sparkly reputation when it comes to weeding out fraudulent buyers, let alone sellers, does it?

This is tantamount to a direct confession that eBay knows the new policy will cause direct pecuniary loss for almost all sellers by way of lowered positive feedback percentage disqualifying them from PowerSeller, and thus invoice-discount, status.  At what point does this become conspiracy to defraud?  Could someone advise please?

eBay’s dressed up announcements of fanfared fee cuts are nothing more than a P.T. Barnum lie.  If you ignore all the hype about the fee changes, and look at the other announcements that will qualify who can and can’t get the discounts on final value fees, and who can and can’t become/remain a PowerSeller, you’ll see that all the non-fee announcements are designed to massively cull the candidates receiving reduced invoices.

Forgetting momentarily the tiered FVF discounts by DSR or PowerSeller level, and we know eBay has made several moves in the last 2 years designed to shuffle everyone down the ladder for PowerSellers, even out of the PowerSeller program altogether, we start with the newest rules directly affecting PowerSellers.  Remember, only PowerSellers will be eligible for the discounts.

First, to become/remain a PowerSeller, a seller MUST register as a business user before May 2008.  There will be an appeals system for those who are genuinely not businesses (e.g. clearing the contents of an inherited house, or of their own private collections or attic), however, the implications from announcements and forum posts is that they will be unable to sell between becoming PowerSeller qualified and finalising the non-business appeal.  A great many sellers have objected to this condition, as blogged in the previous post.

So that means any genuinely non-business, otherwise-qualifying, seller will receive the full rate of the fee hikes, and no discounts - that’s a large number of sellers.  As countless eBay forum posts have pointed out - despite the “eBay maths”, the real world maths show that they are genuinely fee increases and not Bill Cobb’s “marginal reduction in take for eBay” (unless he’s referring to the reduction in seller numbers using eBay?).  No surprise on the spin about that one really. 

From the moment eBay dreamed up this fee increase + discount announcement, they knew there would be huge numbers of personal sellers that would not qualify.  This is blatently obvious just by looking at the qualification criteria for the discounts.  Therefore the very wording of the webcast announcement from the eCommerce Forum is questionable as to whether it was legally misleading or not.

Secondly, of those who will remain initially eligible for the discounts, with the heavy percentile of users being towards the smaller rates of discount, how many will still be eligible by mid-summer?  The compulsory PowerSeller registration as business sellers, has already led to swathes of sellers stating they will quit eBay if they are forced to display their name and address on every listing.  This is because many are legitimate, tax-paying businesses that operate from home, that do not want non-buyers discovering their home address details.  As several pointed out, the moment they put their eBay shop settings into “holiday mode”, the burglars and thieves will be queuing up at their door.  Because this topic had heavy discussion in eBay forums when the business seller program was introduced two years ago, eBay had foreknowledge that a lot of sellers would likely quit or forego the business registration, thus reducing the discount eligibility numbers.

Next comes the DSRs again - even eBay acknowledged that the busier your selling, the lower your DSR rating falls for things like despatch time and P&P charges.  High volume sellers need time to pick and pack products (slowing despatch) and by law have to add sales tax or VAT onto their P&P charges (as a service it is taxable) while in the EU the purchase of postage from the post office carries no VAT to offset against the VAT charged to customers - this means VAT registered sellers will automatically be nett 17.5% more expensive than non-registered, and generally their DSRs reflect this.  So that’s another bunch of sellers that eBay knew would receive lower or no discounts.

The compulsory business registration program, is in my opinion, less about cleaning the site and improving the buyer experience, than it is about reducing seller numbers in total, whilst simultaneously reducing eBay’s exposure to discounted invoices liability.  Almost without exception, every eBay UK forum expounds that eBay is a business dedicated to making money for its shareholders, in preference to making it for its sellers.  This is a direct contradiction to the message delivered from John Donahoe and Bill Cobb at this week’s eCommerce Forum.  Either the eBay top executives are in cuckoo land when they ask us to believe that they believe eBay’s success is directly tied to the success of sellers, or they are so out of touch with what their foreign marketplaces are up to, that they spend most of their time in offices with padded walls and no telephones, dreamily believing the company still adheres to the altruistic values stated by Omidyar back in 1995. 

The percentage of sellers who believe eBay policies are exclusively for the benefit of eBay and “sod the paying customers” has never been so high as witnessed this week following the announcements.  Almost every forum thread, on eBay about the changes, is dripping with vitriol, angst, desperation, frustration, or plain old uncertainty of the future.  The declarations of deliberate intent to non-comply, or to sidestep and twist, several of the changes, are almost as common as the announcements of quitting eBay or never leaving feedback ever again for a buyer.  Change?  Yup, eBay are certainly driving that amongst their formerly good sellers.  Wonder if the bad ones will change as drastically?

In closing this post (I have to publish it before it becomes War and Peace) I’ll leave the last word to Richard Ambrose, remember - he’s the Head of Trust & Safety at eBay UK, who, in a forum response here, uses a classic eBay double-speak to launch a forewarning that buyers are going to be encouraged to leave negative feedback for sellers, and for the slightest problem…. 

He said, “These changes aren’t designed to ‘target sellers’, however they may feel. They’re to keep buyers coming back to and bidding on the site, and as such ought to benefit everyone in the long run.
We absolutely want buyers to be able to neg without fear, so that bad sellers are identified more rapidly and clearly and can be either reduced in visibility or removed from the site altogether. At the moment, feedback isn’t fulfilling that purpose, and we think the changes will restore its role as a means of highlighting danger for buyers.”

…… more opinion & analysis of the 2008 changes to eBay worldwide will keep arriving over the weekend.  Don’t forget to add your comments to this post.

Ed

eBay UK & Ireland announced late last night, an overdue revision of their policy for sellers who are VAT registered, and how VAT must be displayed in their listings.  The announcement can be read in full here.

As to be expected, they’ve put some spin into the announcement, which is that since the new fees and other policy announcements, this week, included that all PowerSellers must now register (on UK & IE) as Business Sellers or they won’t qualify for the PowerSeller discounts, even if they’re not a business, there has been a huge outcry across all the eBay UK discussion boards.

In the eBay UK, Q&A and PSB forums, eBay “Pink” Kerstin has taken an absolute hammering of anger and objection to the new policy, because it means everyone who registers as a business seller will have their physical address on every listing page, raising personal and home security issues, plus objections about the dumber end of the eBay user community then regarding every seller as a 24 hour convenience store - i.e. they can pull the address from the listing and pop round any time of day or night to “retail buy” goods off-site. 

Some existing business sellers have reported buyers turning up, unarranged, at midnight on a Sunday for instance.  Others have very real fears that this policy will allow  “prohibited others” to locate and visit or harass them (estranged ex-spouses subjected to court orders etc).

In reality, the enforced business seller registration and geographic address display in all listings are overkill.  The existing eBay policy already provides enough (protection of eBay) for business sellers to comply with UK law.

The upshot of it was that many complained that eBay would do better to clean up the VAT and other scams before clamping down on the powersellers being business sellers or not.

Thus, with the business/powerseller deadline about in May 2008, we get the rapid kneejerk reaction of the above announcement in an attempt to sooth resistance to the enforced “register as a business or lose the ability to sell” policy that will be arriving in March / April.

In reality, I’m all for an across the board policy on VAT / Sales Taxes being enforced as displayed inclusive, on the site - it allows for sellers to add a description line that VAT is included and reclaimable by other VAT Registered Businesses, but how many will remember to deduct it from EXPORT sales to outside the EU, and refund the VAT back through the buyer’s PayPal account (or other payment method)? 

How many sellers will get stroppy when nudged about the VAT reduction (for non-EU buyers) between close of sale and before payment being made?  It will be a really good test of professional customer service amongst registered business sellers, and should be reflected in the DSR ratings over time.  I also expect it will lead to a lot more sellers with escalating negative feedback, especially once the new “sellers can only leave positive feedback” policy also comes into force in a few months time.

Ed

Sun Microsystems announced a few weeks ago that they’d be attempting the acquisition of MySQL for one billion dollars, made up of 80% cash and 20% stock options.

Sun’s Chief Exec Johnathon Shwartz refers to it as “most important acquisition in the company’s history” and I couldn’t agree more.

Whilst most of the industry pundits are proselytising the relevance of the acquisition to put Sun alongside IBM, SAP, and Oracle in the database arena, MySQL’s particular relevance is to Small and Medium Enterprises (SMEs) due to its lightweight code (it has roughly 10,000 features compared to the bloatware of the bigger names with 50,000) which means easier and faster implementation and maintenance.

This enables SMEs using MySQL to be more nimble and quicker to market with applications and solutions, and being Open Source freeware, it is the database of choice for web hosting services, and used generally in parallel with Linux implementations - this combination seriously contributing to the cost-of-entry drop for creating websites that has been a phenomena since the Millennium.  MySQL has some big name pay-for-support clients, amongst them Google, Nokia, and Yahoo, so they shouldn’t just be thought of as software for the little people.  With Sun’s clout behind them, they should be able to make faster inroads into the large enterprise and multi-nationals market.

As an old hand in IT, and with vivid memories of the battles for supremacy by the mega corporations during the 1980s and 90s, I can’t help wondering if someone at Sun has seen this opportunity to work off a grudge?  Remember the various supremacy battles, around 10-15 years ago, between Sun and the Wintel partnership concerning OS’s and system performance?  I do .   Intel were particularly peeved that they couldn’t produce platforms with the PR pulling power that Sun SparcStations had after George Lucas proudly spread the word that the Sun systems were the engines for producing the special effects in the early trio of Star Wars movies.

I also remember, around 8-10 years ago, the cries of bewilderment when Microsoft diverged MS SQL off at a tangent from other SQL incarnations, and effectively made it proprietory, just as they did with other code families (xhtml and so on)…… maybe, just maybe, this is Sun’s opportunity to turn and bite Redmond in the bum? 

After all, it wasn’t that many years ago that Mssr Gates was dismissing the Internet as worthless to Microsoft, and not a millennia ago that he was dismissive of early versions of Linux as a viable competitor to Windows.  I’ve still not seen too many signs of Microsoft acknowledging that they’re certainly losing market share to the Open Source community in general.  And it seems to be an accelerating situation, as the Firefox success story illustrates.

 Ed

Ever noticed how despite our best intentions, we tend to drift towards using locations or services where we can find all we need in one place?

That’s the basis behind the development of everything built by humans over millennia, whether it’s rural markets on a wednesday afternoon, high street shopping zones, shopping malls, or the out of town superstores.  It applies to practically everything we do and was the root cause behind some towns being industrial centres, and others being holiday resorts.  It’s also, ultimately, one of the aims of BuildaSkill.com with regard to serving home and micro businesses, whether you’re a freelance consultant, or a self-producing ceramics artist in your garden shed.

Recently I came across a neat snippet in the blog at MediaWhiz.  I’ve used MediaWhiz before but hadn’t realised it.  They’re the owners of AuctionAds (now merged into ShoppingAds.com since the turn of the year), but I hadn’t realised they also owned a load of other similar services. 

Now, because of an escalating list of RSS and XML feeds, they’ve created a “new home of the one central blog for all of MediaWhiz’s properties:

Text Link Ads - Static Text Ads
ReviewMe - Buzz and Social Marketing
AuctionAds - CPA Product Ads *
ShoppingAds - CPC Product Ads **
Filinet - Affiliate Marketing
AdNet - Display Advertising
Coregistrations - Custom Lead Generation
MonetizeIt - Customer Acquisition
WhiteDelivery - Email Marketing
MediaWhiz Search - Search Marketing”

• * CPA = Cost Per Action - pays the advert hosting publisher when the viewer completes an action - usually buying a product or paying a membership fee, etc.
• ** CPC = Cost Per Click - pays the advert hosting publisher when the viewer clicks on the advert - these are rarer to find, and harder to join up to, to add to your website and newsletters, simply because they can be more lucrative for you.

Now that I’ve discovered that little list above, it’s going to help me fill in some of the blanks in my marketing and website monetising plans    and I thought it would be a good idea to share it with you all….. no, it’s OK, you don’t have to all thank me at the same time.

There’s more news about some of the above programs in our forums here at BuildaSkill - why not pop across and join in the discussions?

Ed

Just a quickie to let all our readers know that the Beta of our site portal rolled out today.

The portal will be the home to our Classifieds and JobsLine advert sub-sites and many other functions in the coming months.

Please have a play and let us know what you think, and of any bugs or glitches you discover.  Simply input the site base URL into your browser ( www.buildaskill.com) or click the link at top left of this page.

Have fun

Ed

Worldwide speculation around the internet is rampant.  eBay will be announcing fee reductions next week is a wide-held belief, and CEO-elect John Donahoe has fuelled those speculations.

Current odds favour the suggestions that core listings (auction and BIN) will be seeing lower insertion fees (ILFs) with increased final value fees (FVFs) and either a reduction of the basic Gallery fee, or a rollup of Gallery into the ILF, as is currently happening in France & Korea.  Rumours also abound that shop listings (SIF) will have free insertion due to their highly restricted visibility, and that cost for BIN listings will overall be somewhere between current levels for BIN & SIF.

In a press announcement to Associated Press, “Donahoe pledged to upgrade the site and to revamp its fee structure. Though details are to come later, he indicated that eBay would lower the fees that people pay to list something for sale but raise eBay’s commission on successful sales.”

Whilst Wall Street focusses on the money numbers from this weeks Q4 results, many eBay sellers are looking at numbers that more personally affect them -

• In the fourth quarter, the company made little progress on its count of active users, people who have bought or listed an item for sale in the past year. Active users rose 2 percent to 83.2 million.
• The number of items listed on eBay’s various sites rose 4 percent, reversing two straight quarters of declines.

That second point is a doppleganger - of course number of listings rose during the fourth quarter - afterall, it’s part of the pre-Christmas selling season and the time when sellers are at their most active.  However, the only 4% rise shows a serious decline over previous Q4 increases.

Increasing active users by only 2% in demonstrates just how many people are leaving eBay, especially when you see all the zero and less-than-20 feedback users in your sold items list.  2% of 83.2 million = 1.66 million extra active users in 2007, and with previous years reporting a steady 5-10% active membership growth, implies that somewhere between 2.2 and 5.3 million active users left the site last year.  This raw estimate alone does not tell the whole story - which can only be known by eBay number crunchers - regarding the volume of activity lost by those emigrants.  Activity in eBay forums indicate it is the medium to large volume listers and sellers that are leaving.  Improved performance on other sites appear to back this up.

Skip McGrath blogged on 29 December 07 that eBay has been toppled from the top of the online auction tree - “a major goal was achieved by a small Oregon company known as OnlineAuction.com (www.OLA.com).  The current items listed numbers quietly went on climbing, despite the fact that the item count was dropping on industry Goliath eBay. According to online auction monitoring sites, the number of auction items listed on eBay was 9,815,433 as of Sunday the 23rd, while the OLA.com item number count topped 10,144,000 and kept climbing. As of the time this announcement was written, eBay’s count was reported at 8,985,037, while the OLA.com item count was more than 10,295,400. “

All of this is tentative evidence that despite being a household name, and reputedly the busiest online auction/store site on the web, eBay have priced themselves beyond the point of acceptability.  Long-term sellers may say they did that in early 2006 or mid-2007, but the numbers never really supported those early complaints.  Now they do. 

The imminent departure of long-term CEO Meg Whitman, and across the board reshuffles reminiscent of a UK Labour government’s annual Cabinet switcharound, plus the lowest share price in 4 years, combined with eBay losing the most popular (by number of listings) slot during the pre-Christmas week, and stagnant user and listings growth all indicate what sellers have been complaining of for several years - “It’s just too damned expensive to use eBay”.

Let’s hope CEO-elect Donahoe is genuine in his hints, and not just placating the stock holders and analysts, otherwise the previous two quarters of user-base decline could become irreversible, and as with AuctionsOnline.com, there are plenty of heir apparents waiting around the corner to boot eBay off its global and national thrones.

Ed

For some, it’s the announcement they’ve been waiting for, for over a year. 

For others, it’s not news but a scheduled event. 

The announcement has arrived on eBay and Ms Whitman will be stepping down from the top slot effective 31 March 2008. 

John Donahoe, current head of eBay Marketplaces will succeed her, and the much liked PayPal President, Rajiv Dutta, will step into Donahoe’s shoes.

To be expected, her retirement notice is “sentimental & gushy” with nice comments and the massive controversies between sellers and eBay’s policies of the last two years don’t get a mention other than as “a few bumps along the way“.  Such blind disregard for the tens of thousands of sellers whose businesses were betrayed and wrecked or sunk by policy change announcements in summer 2006, Feb 2007 specifically, and throughout 2007 generally, will thus be greeting her retirement announcement with cries of “good riddance”.  Although she will remain a director and promises to continue buying and selling on the site, because “eBay is in my blood“, she will not hold a titled position within the company, implies the announcement.

Sellers have been Whitman’s whipping-boys for far too long, which explains part of the reason the share price is so depressed compared to a few years back, and why click-fall and traffic is a fraction of what it was during winter 2005-06.

Worryingly, Donahoe’s history as head of Marketplaces also puts him in the target-shoot zone from sellers, regarding market and trade restrictions introduced since eBay Live 2006, and he will be taking over as CEO with the ball and chain baggage of having been the hatchet man responsible for some of the most unpopular cross-border visibility cuts that eBay introduced in 2007.  Perhaps Ms Whitman no longer being above him will reveal that he too thought they were a bad idea, or perhaps it will reveal he was the prime instigator, and more will follow.

Rajiv Dutta is already showing on the eBay executive roster as the President of eBay Marketplaces and Executive Vice President of eBay Inc. with overall responsibility for eBay Marketplaces.  It’s to be hoped that Rajiv will bring with him the same passions for market openness and seller protection that he displayed as head of PayPal, as then, finally, sellers may be able to close the file on the last two years of trauma, and they could find eBay becoming the profitable, safe and fun marketplace for fee-payers that it used to be. 

On the Nasdaq, eBay’s share price remains stable at a 48 month low on news of the announcement, trading at $28.94 at the time of writing this.  Did this influence the timing of Ms Whitman’s announcement?

My completely unqualified advice would be that the next few days are the time to add some eBay stock to your portfolio, ride out the bumpy next two months and begin watching for a proft-taking sell position between the annual early summer slump and Christmas. 

eBay share price - 5 year trend

A little difficult to see on this graph, early summer is the traditional low point for share price - usually in June.  That may change this year with the top jobs being swapped around.   This would normally be the “smart” buy time, but I have a feeling that for this year at least, we might be seeing the price bottom this month.

Watch for a surge in price in September-October, which seems to have been the trend for the last 5 years and look to sell during the peak in that period.  From our own eBay activity, on-site traffic seems to be peaking during September (sales GMV certainly does) rather than the expected November or December - this began following the complete traffic collapse after January 2006 (reflected in the 5-year share price graph above).

It’s highly unlikely eBay Inc. will see the same share price inflation it saw in 2003, but a return to the Q4-2005 or Q3-2007 levels should be achievable if the new top management look to the history books of eBay policy and direction.

Ed