Seriously who is guiding up??? This is a company that is practically minting it's own cash, has zero debt no short term financing needs and is trading at not even 2x book.

I can't even think of a safer stock to be in right now. Even if earnings nose dive this company is safer than any brick & mortar retailer out there.

They have just instituted a flat fee for selling that is as low as you can go. You don't have to auction anymore. I plan to do more selling with them. Craigs list costs nothing. You get what you pay for. In a tough economy, more people will be selling all kinds of goods and services.

I dont know, I mean overall consumer spending is slowing down. Thrifty consumers may flock to sites like ebay to find inexpensive products, but people have simply stopped buying, period. It's not even about finding the better price, they just dont purchase anything. Sentiment is pretty bearish (http://www.predictwallstreet.com/forecast.aspx?symbol=EBAY) and I have to agree.

The economy is only a part of eBays problem. Ebay has alienated thousands of long time sellers by eliminating the checks and balances in the feedback system. By not allowing sellers to leave negative feedback for buyers sellers are being scammed, threatened and even thrown off by 0 feedback and non paying bidders. Now, eBay won't allow checks or money orders to be accepted and they've instituted a DSR system that is hurting many seller due to unrealistic, and
inexperienced buyers. Most of eBays recent policy changes have been anti-seller. It has created much hostility toward a once beloved company. I don't see much hope until current top management is replaced.

eBay's problem and what is responsible for their 3rd quarter slow in the marketplace is the result of 3 issues all changes made by CEO John Donahoe. The issue is not the economy either. These are 3 very serious issues that could only function in undermining the success of the marketplace and any analyst with a brain will pay attention to these issues.

1)Note the huge 127% increase in ppc ad revenue from Q3 2007 to Q3 2008. These ads are on eBay.com (well all of the eBay marketplaces). The presence of any outside ads on a selling venue or webstore is clearly going to negatively impact the function of the site. So, prior to the changes made to the ppc ads in Q3 the marketplace had already been wounded by their presence. Yes, the ppc ads have been present for nearly 2 years, but the impact has increased exponentially (as evidenced by the huge increase in revenue). Why so much growth over the past year?

A) the text ads at the bottom of search results are now keyword triggered - so the ads served up directly compete with the merchandise being offered by the sellers on eBay. This began - at least I became aware of the ad targeting about 6 to 7 months ago. I had known the ads were present, but had not experienced the user target and keyword trigger until about 7 months ago. Only an idiot would suggest this does not impact the marketplace.

B) CEO John Donahoe is so enthused with the PPC ad revenue and is so clearly short sighted that he decided to up the probability of clicks by reformatting the ad placement. No where online will you see ad placement like it is set on eBay.com. So if you are familiar with eBay's layout you know that the search return is a list which of clourse has a next page button after the last item in the list. Well,I should say use to have the next page button directly following the last search result. The brilliant mind of John Donahoe has moved the next page button below the text ads. So the searcher has to pass through the ppc ads to move to the next page of search results. For anyone to deny this negatively impacts the marketplace is really a fool.

C) Apparently, CEO John Donahoe was still not satisfied with the revenue the PPC ads were generating so he increased the number of PPC ads from 3 to 5 stacked on top of each other all above the next page button. So now the user has to pass through 5 text ads consuming about 5 inches of space being used by text ads only. As I noted above this is not a feature of other websites. Recognizing that internet users are familiar with ads being under the next page button not above it is only logical that the searcher believes there is nothing else to purchase, so they either leave eBay altogether providing nothing to eBay's revenue pot, or they click the keyword user behavior history targeted ads.

So eBay's greed and short run thinking has forced a decline in the marketplace in favor of a marketplace dependent revenue source. In other words, eBay is throwing the marketplace under the bus to foster the ads that depend on the marketplace to generate any revenue for eBay Inc... So as John Donahoe focuses on ad revenue growth he is also actively and simultaneously killing both the marketplace revenue and by extension the revenue from the ads.

The injury to eBay as a result of the ads doesn't stop there- no the fool is taking down PayPal as well. Clearly, John Donahoe forgot how much PayPal relies on the eBay marketplace for its revenue. CEO John Donahoe wants to shift the core revenue from the Marketplace to Paypal, and he is wise enough to realize he needs to marketplace to make this happen (this is the reason for eBay's tying of the PayPal service to the eBay marketplace service - clear anti-competitive behavior and this is coming around on eBay so analysts should consider the legal issues eBay will be dealing with soon). Anyway, explain to me the logic of using the marketplace as bait for increased PayPal users, and at the same time funneling these users out of the marketplace where there are payment method choices if the goal is to build PayPal's market presence??

2) CEO John Donahoe decided eBay was going become the next Google by redefining the search engine based on "relevancy".

A) However, the relevant factors are unknown, undecipherable, and inconsistent. His delusions of grandiosity have led him to believe that he knows what people want and has created or attempted to create a search that filters the results based on the users history while shopping on eBay (and elsewhere that they have knowledge of from PayPal's user data and eBay marketplace and PayPal have granted themselves the rights to share user data which can only be achieved by breaking privacy laws). The arrogance in presumptions speak loudly of the potential and actual negative impact this has on the marketplace- when the search begins to dictate the user's interest rather than the user dictating to the search engine his/her interest you are going to have problems, and there are. People are complaining they can't find what they are looking for (no doubt this is associated with the misleading perception of what is available in the marketplace caused by the ad placement). Searchers are complaining that the search is returning irrelevant results. This is resulting in users using Google to find what they are looking for and sometimes they find themselves on eBay again, but sometimes they find it elsewhere so the marketplace losses out.

B) CEO John Donahoe has launched what is referred to as the "new finding experience", but it appears he jumped the gun by implementing a search engine algorithm that is full of glitches causing severe problems on the site. Recall that the CTO essentially ran out of eBay. In consideration of the unbelievable failure of this search engine that users have been experiencing since mid-August to some extent and as a total nightmare since September 16th when eBay injected the entire marketplace with the "new finding experience" that was not not only ready to launch its appropriateness for pilot testing is questionable. Simply put - eBay.com is running with a broken glitch ridden ineffective search. This is killing the marketplace fast the sales are so low for sellers that you can find several discussion board threads per forum of sellers wondering what the hell is going on because business essentially dropped off on September 16th.

If there is anyone who can even begin to suggest this is not an issue for any website than you know you have encountered an idiot.

3) When CEO John Donahoe dreamed up the policy changes this year he clearly ignored or was entirely ignorant of who the eBay user base is made of & eBay's role in the relationship between sellers.

A) eBay marketplace is like its own economy inside of our larger market system. Just like the US market system's functioning being driven by members of the economy purchasing and selling to each other the same is true for the eBay marketplace's market system. eBay members buy and sell to each other. The large majority of people selling on eBay also buy on eBay, so when CEO John Donahoe made these unfriendly seller policies he neglected to look at each member as a whole and instead viewed the user base as consisting of only 2 "classes" without any over lap.

Well, if someone alienates and insults a seller who is also a buyer and often does more buying than they do selling then not only does the marketplace lose the seller it also loses the buying component of the user. No one would be jumping into shopping on eBay after being kicked in the face by CEO John Donahoe as a seller. So, the marketplace loses a buying member and a selling member with every individual they drive from the marketplace.

B) As with any business the small businesses on eBay have their loyal customers too. So, when CEO John Donahoe drives that seller/buyer from the marketplace he is also driving those loyal customers from the marketplace. For example: if I packed up and left today I can guarantee that my buying and selling would leave along with over 30 of my repeat already pissed at eBay for their treatment of me customers. I am a small seller imagine the loss in active users for every large seller that has left and will be leaving at the close of the holiday season.

This is not going to be a pretty picture in about 9 months when the fallout of this idiots policy changes become transparent (active users are based on the previous 12 months so we won't see the true damage until May next year and again at the end of 2009.

I highly caution and suggest people stay away from eBay as an investment even long term, because it will only get worse from this point on. Its your money, but if your foolish enough to ignore what I am saying than you'll be rewarded with a very thin wallet- so to speak.

The longer CEO John Donohoe and his plan of "disruptive innovation" continues we will continue to witness (and experience) a disaster that will ultimately end eBay's existence. This company is no longer a short term or long term investment if the goal is to make money and not throw it away.

Sellers know exactly why Ebay is tanking and it' s not the economy. This has been going on since April - CEO JD seems determined to drive the company into the ground and many of us have left for greener pastures. Ebay has also kicked to the curb scores of smaller sellers who made the site what it is, in favor of giving free listings to large retailers such as buy.com. There's a lot more going on here than the economy and I wouldn't touch their stock with a 10 foot pole.
Check out today's Baltimore Sun article about the failure of this internet giant and the reasons behind it.

Ebay has weathered stock market dives before because when going gets tough, people buy used and they buy cheap. Ebay **should** be doing really well in this economy but they aren't and it's their own poor mismanagement.