If eBay buys StubHub, shareholders need to speak up

Yes Brian and Joyce lets talk about acquisition strategy. Lets balance out the argument shall we and put things in perspective which I haven't see you do. And avoiding to address the counter arguements but going off into different tangents focusing on your narrow viewpoint. See post #9. Address that in the context to your critique.

What you don't understand is that it took Paypal literally a decade to iron out the complex kinks and intricacies of multi-currency/lignual, security and developing money transfer intermediaries around the world. Then ontop of that the network effect of critical mass of customers and merchants.

I come from the online gambling space and PAYPAL was the dominant force before EBAY purchased them and became legit for commercial market.

Only time will tell about Google Checkout. But what you sellers and blogsters like you don't talk about is ALL the failures of Google. Also tons of people had tried taking a shot at PayPal..even Ebay before they purchased them! Yahoo Payments was another challenger who failed.

30% of paypals revenues come from off ebay sources from what I recall.There are many small businesses who already use paypal. There are already much more people who are signed up with paypal vs google so there is an established network effect already and the many paypal competitors that are in the grave tried to do just what google is doing with no traction. The key is whether google search can act as an extension to re-enforce google payments - I don't see how this can gain traction on an established paypal ever - even with deep discounts...

So Google will have an uphill battle but then again watching them closely. I can't be too arrogant :)

Three months after its debut, Google Finance traffic is barely registering in the Business Information Category; Yahoo Finance is the most visited financial news and information destination on the Web, garnering almost 35% of all visits in May, while Google trailed at a distant #42 most visited financial destination.

Google Finance is but the latest Google Vertical struggling to be a destination. In fact, the bulk of Google Verticals are languishing, as the Hitwise “Rankings of Top 20 Google Domains Week Ending May 13, 2006” below shows.


http://blogs.zdnet.com/micro-markets/?p=134


http://www.businessweek.com/magazine/content/06_28/b3992051.htm [Source: BusinessWeek, July 10, 2006, “So Much Fanfare, So Few Hits.”]

Google Talk. The ten-month-old instant-messaging system ranks No.10 in the world, with just two percent as many users as market leader MSN.

Google Maps. Although it ranks No.2 worldwide, viewership is 20% less than market leader MapQuest.

Blog Search. This nine-month old web log service was expected to bury market-leading Technorati. It gets less than one-fifth as many users.

Google Finance. Three-months after its launch, the site ranks No.40 in the U.S.—despite strong initial buzz. Yahoo! Finance remains No. one.

Orkut. The social-networking site gets less than one percent as many U.S. visitors as MySpace.com.

Quote Brian:
The one unknown issue that is causing eBay grief right now is a well-documented "seller revolt".....


Grief is Pain..
I think we'll get more of the impact of the sellers dissatisfaction. There have been revolts in the past and ebay has done little or nothing to calm the storms or appease their customers.

In fact, they have often added insult to injury with things they say, especially to the media that discredit their customers or with things they do.. like with the special discounted listings for India on the US site. That was a very bad move on ebay's part.

Ebay usually just waits for the storms to blow over... saying things like:
These uproars have happened before.. nothing new.. there will always be dissatisfaction for some.
(Hey, when you're dealing with millions, who cares about the insignificant thousands..?)
But those thousands can add up.

With each revolt more customers are hurt in various ways. As I said, ebay does not usually handle their problems very well. The revolts have not all been about fee increases, they involve many different aspects.. Changes on the site, Searches, Category changes, Billing errors.. just to name a few. Not all the uproars have gained the attention of the media because it's difficult for ebay customers to get the attention of the media, especially when ebay management downplays situations or discredits their customers.

However many people do not soon forget insults and injuries. Each uprising seems to grow. I can't even count the times I have read where some one has responded to another ebayer's story with "I feel your pain"... These are not just words, many truly do feel the pain... their own pain as well as pain for others.

So as we go along more and more people again "feel the pain" and they join the furor, even tho the current complaints may not involve them. Once you get a bad taste for something, it's hard to get rid of. Ebay is becoming better known for pains than for it's "magic".

I think ebay is where it is (or was), not because of any wise thing management has done..
But because of timing and a lot of luck.

That can happen again with another site and millions of people will be better off than they are now.

acquisitions...

Ebay management evidently has not read "How to make Friends and Influence People".

They have now "acquired" many foes who feel pain.. real pain.

I was considering investing in ebay 18 months back, and Oh boy am I glad didn't. Much as the seller revolt may have been downplayed by eBay it is continuing to rumble on, and I don't think the last has been heard of this.

Alternatives, although small have been steadily eroding ebays core business, and picking up on seller discontent. The seesaw is now 'rebalancing the same as the marketplace' and may well tip away from ebay as more choice of items become available elsewhere. This together with the security and fraud issues which it fails to address, is driving buyers away to what they perceive as safer environments. The magic has gone.

Brian last comment on this blog topic here. As an investor I weigh all factors and try to be objective before taking a position.

I'm looking for a nugget of insight that will poke a significant hole in my investment thesis to change my position. I'm well aware of the upset sellers and departures. My sympathies to them. But what I haven't seen is concrete facts and numbers to sway me from truly credible sources.

Touche

For more information regarding the eBay purchase of stubhuh.com, please feel free to check out my blog at http://seatwar.blogspot.com.

This blog is focused on the backend of the ticket business.

If e-bay or anyone else for that matter can buy Stubhub for only 300mil they'd be making one great deal. This is a SUPERFAST growing company that's made 200mil in sales this year. It would pay for itself in no time at all, given their current rate of growth or even past rate of growth. Do you really think that Stubhub NEEDS e-bay to make it? I think it's the other way around, e-bay could sure use their help in the ticket selling biz. These guys know what their doing!

BURLINGAME, Calif., Oct 25, 2006 (BUSINESS WIRE) -- StubHub tops the list of the fastest growing Internet, Media & Entertainment, and Communication companies in Silicon Valley as recognized by Deloitte & Touche USA LLP at an award event held tonight in Burlingame. The "Silicon Valley Technology Fast 50," Winners are selected based on percentage revenue growth over five years from 2001 to 2005. StubHub led ALL Silicon Valley companies with a 13,251 percent revenue growth, beating out the likes of Google and Yahoo! who came in 3rd and 12th respectivly. In addition, StubHub placed 16th overall among the fastest growing companies in all of North America on the expanded 2006 Deloitte Technology Fast 500 list.

http://www.marketwire.com/mw/release_html_b1?release_id=179511

Deloitte & Touche USA LLP are not the only ones watching this outstanding company.

August 25, 2006 -- SAN FRANCISCO
StubHub Named Fastest Growing Private Retail Company in America by Inc. Magazine
Annual "Inc. 500" List Places Ticket Marketplace 8th Overall With Three-Year Sales Growth of 3,247.8%

http://www.inc.com/app/inc500/viewCompany.jsp?cmpId=2006008

In my opinion Stubhub would be getting robbed at 300mil. Personally, I'd rather see them IPO if and when conditions improve for the IPO market. That might prove to be a great ground floor stock investment.