It was not a festive Cinco De Mayo for eBay investors. While the broad market shook its maracas, the auction site fell five percent on four times average volume. It closed at $32.39. For the year it is now down 23% and since January of 2005, you don't even want to know about it.
This comes on the heels of Thursday's analyst conference where clearly the takeaway was more disappointment and wondering where they might re-accelerate growth domestically while navigating a complex environment in
To top it off, both AOL and an AT&T/Yahoo! tag team revealed details of new VOIP offerings that will challenge eBay's Skype. As it becomes abundantly clear that Internet telephony can and will be offered by everyone including my Uncle Willie, it looks more like, perhaps, $2.6 billion was too much to pay for a leader with low barriers to entry and users looking for free or very cheap service.
Frankly, I have no sense if eBay is cheap to buy yet. While the share price has certainly gotten a lot lower, if growth is sputtering, it may at best be dead money for a while.
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Reader Comments (Page 1 of 1)
5-06-2006 @ 10:11AM
EJ Passeos said...
Good Morning.
I'll attempt to stick with ebay/Skype thoughts here. The Street was somewhat aghast at the price paid for Skype--and they were right.
AOL has big plans in the space...Yahoo is trying, and as you said, others will, too. Where the revenue lies is to be determined, but clearly ebay was stretching with the rational for the purchase. PayPal was a no-brainer. Craig's list...okay. But not the $ shelled out for Skype. Users--I'm speaking personally here as well--are furious over near constant fraud on ebay and why ebay doesn't seem to be able to stop it. I won't bore readers with details, but for us selling things on there has been highly successful and at times maddening. Surely, ebay could have used that $ to enhance security, somehow. They could at least acknowledge both it and their lack of help for users victimized it and the laughable ebay response to recovering fees.
Instead, we are told how cool it will be when a potential customer sees your item and pushes "talk with Skype." Not likely. I can't even get our customers (Harley-Davidson dealer) to use Campfire chatting, why/how am I going to convince them to contact us through Skype.