When we took a look at eBay (NASDAQ: EBAY)'s fourth-quarter earnings last night, we also made note that long-time CEO Meg Whitman would be stepping down, to be replaced by John Donahoe. We wondered what changes Mr. Donahoe would be bringing to his new position, and some of those answers have come quicker than we expected, as Donahoe has already announced a few changes that we can expect to see.One thing consistently on the mind of eBay users is the website's fee structures. Since last year, users have been openly voicing their disappointment with what they consider to be abnormally high selling fees, and it seems like Donahoe will quickly look to address these concerns.
Donahoe said that within a few weeks, we will be seeing a brand new fee structure from eBay. In response to what users are demanding, eBay is planning to lower its upfront listing fees, but at the same time will be raising final selling fees. These final fees are only paid once an item has been successfully sold, and I am sure that users will not like to hear this too much, but they should be happy to hear that the initial listing fees are going to be reduced.
Another big change for eBay will be the emphasis the site places on fixed-price items. Historically, eBay has mostly been about one simple thing: user-to-user auctions. Now that the company finds itself in some steep competition with rival Amazon.com (NASDAQ: AMZN), the company has decided to put more emphasis on its fixed-price items, bringing a much greater "Amazon-like" experience to eBay.
While the new changes may ring positively for eBay users, it will more than likely lead to lower revenues for the company in the short term. As a result, the company was forced to lower its guidance for the current quarter as well as its full year 2008 outlook, which has resulted in shares falling in today's session. The stock traded down to a new 52-week low of $25.75 earlier in the session, but has bounced a bit from the lows up to $26.70, which is down 7.6% with about an hour left in the trading session.
Looking down the road, it is anyone's guess how the new changes will impact eBay's business. I assume that the lower initial listing fees should result in more listings on the site, but will it be enough to get eBay back to its glory days? Time will tell, and until we get more details on the upcoming fee structure, it's just way too early to predict what reaction eBay users will have to the new changes.
Other changes that some industry insiders are calling for Donahoe to consider are structural changes to the company. Will Donahoe look at the possibility of selling off Skype? How about the option of spinning of its popular PayPal business into a separate company? Both of these options are choices that Donahoe will undoubtedly be forced to consider once he takes over the reins a few months from now.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer
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Reader Comments (Page 1 of 1)
1-24-2008 @ 7:44PM
Mozelle said...
Meg Whittman is a joke!
She herself now admits that eBay needs new direction and leadership! lol.
She cashed in most all of her shares at $40.00 and now issues a lower forecast for 2008.
Leaving her sobbing stock holders, holding the bag!
She reminds me of old Kenny and Enron in Houston. She leaves with the money, while the building burns. lol.
1-26-2008 @ 8:39AM
BamaBlonde said...
I agree with Mozelle, it is time for new leadership. However, if they want to in still new life into Ebay/Half they need to look at how the site is driving new sellers away! For no reason they suspend their account and keep the Money for 90-120 days. These sellers are taking their business elsewhere, Amazon has to love Ebay. We should all have followed Meg's lead and dumped our stock!! Maybe she bought Amazon Stock.
2-19-2008 @ 7:25PM
CEP said...
Well he certainly has made a impression in the ebay forums. He has risen fast to the top of the of the list of most hated Execs ebay has had. Even Meg looks great right now.
2-20-2008 @ 12:37AM
JUSTME said...
Ditto on his making a distinct impression alright. eBay has shot its own self in the foot by not enforcing its own fraud policies for both sellers and buyers alike. Now its management want to get its pound of flesh out of the honest sellers (and ultimately honest buyers) by making it an online Wal Mart?
Where do these,"whiz kids," go to business school and who grinds every bit of thinking for the long-term out of them?Slash and burn corporate business policies are ruining this country.
People in this country have no delay of gratification anymore and it will be their ruin.
2-20-2008 @ 8:21PM
dave said...
As An eBay Buyer..I Really Hate to see that eBay.com is ruining the lively hood of so many Honest and Disabled and Veteran Sellers!!!!... Many Of The Smaller Sellers Who Helped Build eBay Have No Other Way To Make A Living!!....I Think Sellers Are Right To Take Control!...And,This Strike Is Most Definitely In Order!!!!!...If most of the Sellers abandoned their listings for a Week or MORE!! and Buyers "Don't Bid Or Browse"..It May bring eBay Management to their Senses!!...My Favorite Business Management Professor at GA. TECH always said "If It Ain't Broke...Don't Try to Fix It" ...In My Humble Opinion....The Proposed Feedback Change and the 21 Day Paypal.com Holding Period may be "Unconstitutional" & "Very Illegal"...."One Sided Feedback" may be a violation of the "Equal Protection Clauses" in the the various State and the Federal Constitutions!!.....Additionally....Both The New "Unequal Feedback Policy" and the "21 Day Holding Period" may require that eBay act as a "Law Enforcement Agency" and a "Court Of Law " in order to settle contractual disputes between Buyers and Sellers!!..Both Of These Actions May Be Extremely Illegal!!.... We Need To Help Ebay Save Itself!!....If One Strike doesn't work, Sellers may need to do it Again and Again--->Until it Does Work!! .... Hopefully!!, Persistent Sellers Will Convince eBay Management to Withdraw these proposed changes and return to Business As Normal Before The Law Enforcement Agencies and The Federal/State Courts Bring Them DOWN!! I have heard that One Of The Best Civil Trial Lawyers in Atlanta imay be waiting until the proposed changes take place before filing a multi billion dollar Class Action Lawsuit (On Behalf Of "ALL" SELLERS) against eBay, Paypal and their new cohort General Motors for Violation of the "Equal Protection and Numerous Other Clauses" Of The US Constitution!....Additionally....He may be requesting that US Magistrates and the Attorney General issue Felony Criminal Warrants requesting immediate arrest of all eBay Management and all employees involved in making feedback decisions(in which they act as a Law Enforcement Agency...AND... A Court Of Law!!) I Am Afraid That "Good Attorneys" and the almost Trillion Dollor "Class Action Suit" may Bankrupt eBay, Paypal and General Motors!! It will be Interesting to see how much it may cost eBay, Paypal and Genral Motors to reimburse all of the Sellers that are being be forced to leave eBay and give up their only source of income because of these New Feedback and Paypal Rules!!!! .....Probably Trillions!! ....My Professor Also Said..."Nothing Is "Forever"...Except Death And Taxes!!....STRIKE VICTOROUSLY!!
2-26-2008 @ 9:51PM
B said...
So, Ebay is now business class curiculum? I worked with Enron. Maybe both are examples of," Those who can ,do;those who can't , teach."
2-27-2008 @ 8:28PM
Sheri said...
OMG, I must say this is financialy hurting all the strikers. I hold a 40 hr. a week job, but my sales on ebay was my lively hood. I loved selling and it was a financial help. Our economy is drowning and taking every American with it.
I guess ebay is joining the economy, it is sinking. I have not listed since the strike, and if ebay does not withdraw their proposed changes, I will go else where.
It's us that made ebay what it it is today, 1st the sellers then the buyers. W/O both ebay would not exist.
Great way to put it Dave!
We together could all make another selling/buying area as strong as ebay once was.
Lets Keep it going until ebay withdraws the changes and treats us like we should be treated.
YEA! to all that has joined the ebay strike!
3-04-2008 @ 11:03AM
dave said...
ANYONE HOLDING EBAY STOCK
(OR BUYING AND SELLING ON eBAY)
MAY BE GUILTY OF SUPPORTING AN
ON-GOING CRIMINAL ENTERPRIZE!!!!
Everyone suspects that
eBay may be the World's Largest Fence
Of Stolen, Forged & Knock Off Merchandise!!.
I Think It's time for the FBI, Treasury Dept and
The US Attorney General to Begin An Investigation
Into This Company's Employees (And It's Major Stockholders!! )
Operating as a
Purveyor of Stolen Goods
Normally results in Quick & Fast Arrests!!
I think the recent decision to make
the Feedback System "One-Sided"
may be the Final Nail in the eBay Coffin!!
In order for eBay employees to mediate
the up-coming new Feedback Complaints...
They may have to act as a "Law Enforcement Agency",
"Court Of Law", "Judge" and "Jury"....Are These Acts Illegal??..
Why do The eBay and Paypal Employees
(That render the daily complaint decisions between
Buyers and Sellers)...Operate under incomplete False Names??
Do They know that the Decisions
They are making may be Against The Law??...
eBay may be in deep trouble
as the legitimate brick and mortar
Major Retailers like Sears, Target,
and Walmart demand that eBay be held
accountable for selling merchandise that
may have been stolen from Their Stores!!
One Side Feedback May Test The
Laws Of Equity and Equal Protection!!!
The proposed Paypal 21 Day Funds Holding Period
Will Not Work...It May Be Against Banking Regulations..
And What Seller in Their Right Mind is going to ship a product
Before They Receive Payment (and may never ever get paid)???
Dishonest Buyers Worldwide
will have a Field Day...While Legimate
Sellers may continue to Boycott and Go Elsewhere!!
Unless the new proposed one-sided
feedback decision is reversed Immediately
(or the feedback system is totally removed)...The
decline and fall of eBay may only take a Short Time!!
In My mind...
eBay Stockholders, Employees
Buyers & Sellers may be un-knowingly
(or knowingly) Conspiring to support an
ongoing International Criminal Enterprise!
Conspiracy Is
A "Serious" Crime!!
This comment
has been made by...
A Retired Private Detective...
(& eBay User) of almost 10 Years!!!!
http://www.ioffer.com/info/parody_feepay