Meet eBay’s new boss
When they work out well, management consultants bring a fresh perspective to a company that needs one. eBay’s a strange choice for a management consultant’s fresh look, given that its senior-management ranks have been riddled with former consultants since the day Meg Whitman, who started her business career at Bain & Co., walked in the door.All the same, eBay’s new CEO, 47-year-old John Donahoe, not only is talking about challenging conventional wisdoms at the pioneering Web company, he’s actually challenging them. This is one consultant, after all, who can analyze the problem and then implement a plan.
eBay needs one.In an interview Wednesday afternoon after he was named CEO, I asked Donahoe and Meg Whitman what was right with eBay and what needed improvement. Whitman, tellingly and appropriately, deferred to Donahoe. What’s right, he said, is eBay’s “leadership position in e-commerce,” online payments and communications. By the first two he meant eBay.com, the company’s flagship property, and PayPal, the surging leader in Web-based payments. By communications he meant Skype, on which the jury remains out, certainly as part of eBay.
As for challenges, Donahoe said eBay needs to make sure it keeps up. He said eBay.com needs to make itself easier and simpler to use, that its fixed-price sales function needs to be improved and that the company must continue growing PayPal.The last goal isn’t new. PayPal has been an eBay priority for years, and Donahoe noted that PayPal has experienced three quarters of accelerating growth, the type of boast Whitman used to regularly be able to make about eBay overall. As for the first two goals, Donahoe says 2008 will be the time to prove many of the improvements eBay has been readying during 2007. The company has simplified its home page and beefed up its feedback system, particularly with regard to sellers.
Those are incremental changes, though. More critical will be a move Donahoe describes as “challenging the fundamental precepts of eBay.” For example, eBay’s search function long has listed auctions that met user’s criteria but ranked results by the auctions that would end soonest. It was the eBay way, but not necessarily the best way. Beginning this year, the company will roll out a “best match” function, already being tested in Korea and France, that will prioritize the least-costly fixed-price items with the highest seller ratings.
Earlier in the day Donahoe had told investors that eBay’s best days were ahead of it. I asked him how he could justify that optimism, considering the extraordinary past decade. His answer wasn’t quite as incisive as some of his others. “eBay has a timeless, inspiring purpose and mission,” he said. “Our broadest goal is continuing that purpose and mission and in the process build a great and enduring company.” It’s a worthy goal. And a tall order.
Skeptics and other pundits think eBay should boost shareholder value by ditching PayPal and Skype, arguably its greatest and worst acquisitions, respectively. Donahoe shared his thoughts candidly. “We like the businesses we’re in and believe in the synergies,” he said. In particular, he believes in PayPal’s ability to continue to improve the selling experience on eBay. I point out that PayPal might be able to expand its non-eBay business better with the likes of Amazon.com and Google if it weren’t owned by eBay. Donahoe thinks customers will keep demanding PayPal and that its bigger presence creates a “flywheel effect” that will counter competitive threats.It’s debatable if keeping PayPal is the correct decision, but eBay seems serious about it. The elevation of PayPal President Rajiv Dutta, eBay’s longtime CFO, to Donahoe’s former job as president of eBay seems to prove that.Donahoe seems less committed to Skype. He notes that eBay only installed its own management team at Skype two months ago and asserts that “we’re just getting around to the position where we can test the synergies.” Mark a Skype sale as to be determined.
Finally, I asked Whitman what her plans are for after March 31, when she steps down as CEO. She’ll remain on the board of eBay, where she plans to focus her energies in 2008. She’s also a director of Procter & Gamble (PG) and Dreamworks (DWA). She’s working on her family’s new foundation and also as a national finance chairman for Mitt Romney, a personal friend from her Bain days. Asked what she’ll do in 2009, she responds, “I don’t know about that.”
Let’s look at what this story just said. It just said that only the lowest price sellers will be seen in a search. This means that margins will fall and at some point ebay will only be a mechanism for large corporations that will use it for a marketing ploy. Outside of auction style used goods.. Ebay will cease to be the playground for the little man. Also, as far as feedback is concerned, I used to be a powerseller on Ebay but since I’m not going to resort to low-price competition I stopped using Ebay and grew a much profitable business with just a minimum amount of exposure on Ebay. As for the feedback issues, well there are many buyers out there that are just looking for a freebie. The old saying in sales is that “buyers are liars” can be found on the Ebay feedback forum. In fact, I barely take feedback ratings seriously, unless there is a consistent pattern with a seller such as several statements over a few months time of not shipping an item. Otherwise the feedback system has become a complete joke!! Too many buyers and sellers abuse it’s intended purpose. Too many buyers will get an item and then claim they never got it, or that it was damaged. I say this is preposterous. The good news, is that this is now the time for a savy new startup to strike and take away the ebay dominance. I think in time we will see Ebay fall!! I think that this new search technique will kill everyone but the big guy who will use ebay as a way to bait a customer and then capture them into an offline or other online market forum.. This is where the real money is made.. not on Ebay. Good luck to everyone!
EBay sucks, yes it’s true…..but what’s our alternate option?……..Wha’s the next best auction site……?
i used to enjoy surfing Ebay, but now, its become the new home for street stall sellers of cheap goods.
Has anybody ever tried to contact Ebay? Let me tell you – dont bother, they dont give a dam about you as a customer except when ure paying up.
As for not offering any other option of payment (online) other than thru the dreaded ‘paypal’ system, i have almost completely ceased to use it.
But Ebay don’t care the profits are rolling in, they will sit up and listen when rival sites take more care of their customers.
Ebay sucks.
Not everyone that comes into your store is there to buy something. In a phyical store those who come in and take, and not pay – we call them thieves. In ebay’s world they buy – you ship. They say item not received.Delivery confirmation says it was. Ebay and paypal refunds your money to the buyer. Now you are out of the product and the payment.
As a seller and a buyer for about 8 years now I can only say that the entire foundation the phenomenal Ebay experience and success is in the process of destruction due to the incredibly myopic & ill-conceived management decisions. Only time will tell just how destructive these decisions have been. Until then I can only join the thousands who are choosing another venue for both selling and buying.
Ebay has now become and breeding ground for the worst elements in the auction biz: scammers, rip-off artists, hostile angry people looking for an outlet, and just plain bullies. What a shame Ebay has encouraged open season on sellers and set up an adversarial situation that used to the friendly and enjoyable. I can’t be part of something that’s no longer fun and actually harmful.
I think it’s the end of an era we will all miss unless a quick turnaround to the values that made Ebay a household name is accomplished.
Make sure to check the LAST pages in ebay Discussions “Seller Central” where ebay hides the BOYCOTT threads (at least the threads they have not deleted). Thank you INVESTIGATIVE REPORTERS who are KEEPING EBAY from deleting more!
If you want to report the REAL TRUTH, go to Ebay’s discussion boards “SELLER CENTRAL”. Make sure to check the last pages, though. That’s where ebay’s trying to hide the truth. Hurry before Ebay deletes those posts, too. There’s over 3,000 posts from the angry ebayers themselves!
BOYCOTTING VICTORIOUSLY!
2008 is the year ebay will SINK — and the ebay executives are causing that to happen, due mainly to their asinine decision to remove the ability of sellers to leave honest feedback for buyers (and I say that as a seller and buyer who KNOWS how to use the feedback system appropriately, and who has never left nor received anything but positives).
Too bad the new ceo doesn’t know what it’s like to be on the selling end..
He has set this company up for failure as the sellers are leaving like a stampede!!
Pitting buyers against sellers is not a great idea…
A house divided can not stand…
The house is now divided!!
Boycott Victoriously!!
As a buyer first, and then a seller, & lately part of the ‘noise’ Mr Donahoe so disdains, I would like to ask him why he is using an atomic bomb to kill the ants.
If retaliatory negative feedback is such an enormous turn off to buyers on eBay the solution would appear to be quite simple. Three easy steps.
1. Ban the use of all automated feedback systems so beloved of high volume sellers, who leave a far greater proportion of negative feedback daily than all the rest of eBay combined.
2. Require use of eBay’s automated dispute system during a cool off period by both buyer and seller before any negative may be left at all. This would also prevent abuse of negative feedback by new buyers as a communication tool. eg. When are you going to ship my item? Set in a big red negative doughnut 2 days after auction ends.
3. Understand very clearly that eBay needs sellers, we pay the fees, WE are your customers.
Unless eBay plans to buy inventory, sell, pack and ship you need sellers in all shapes and sizes. We are the glorious flea market that MADE eBay what it is today.
Sellers have the same interest in keeping eBay afloat as you do, many of us are shareholders, imagine that. Without buyers we are all up the proverbial creek.
Instruct your PR flacks to treat us with respect, do so likewise, and we will respond, we are adults, we know how to add, subtract and use our listening ears. Most of us can walk and chew gum at the same time.
Change is inevitable and we all need to learn to adapt. Will the changes eBay makes be good or bad for eBay? we will find out soon enough. eBay has made changes in the past and has quietly reversed parts of them or tweaked them. Take the bidders search changes they tried putting into effect last year. They ended up tweaking it to satisfy complaints. They will probably do the same here down the line after the changes are evaluated. The biggest change of course is in regards to feedback. They took a pretty brassy b__ls stance on not allowing negative feedback for buyers. In my opinion a mistake. My wife sells on eBay and she is one of those oh so “many” small sellers (one of the ones who helped make eBay what it is today I might add) who tries very hard to make sure all her transactions are satisfying to her buyers (She has nearly a 50% repeat buyers feedback rating). However she is not one of those sellers who believes feedback should be posted when a payment is received, and she deals with repeat buyers who believe the same, the remainder being eBay sellers who by bulk from her or people with a genealogy link to a certain item listed. I know this upsets some of buyers, but there are also buyers out there who believe that feedback should be posted when they have received their item and are happy that it was described properly, not damaged, packaged properly, and shipped in a timely manner. There are buyers who believe both and there are sellers who believe both. If a seller believes they should post feedback when they receive payment then by all means they should do so, and in doing so they are satisfying the buyers who believe that feedback should be posted upon receipt of payment. If a sellers believe that feedback should be posted when the buyer is satisfied then those sellers are accommodating their buyers beliefs who believe the same.I believe that eBay should insist that buyers place those beliefs in their terms of sale thus allowing the buyer to decide who’s sales they wish to bid on based on their style of how feedback should be posted. eBay has 2 basic venues of sale. Auction style listings (which usually deal with the collectibles market) and stores ( similar to ordering or buying from a catalog or mail order house). Lets look at the two. Auction style listings are similar to when we go to an auction and bid on an item we collect. However at an collectible auction we have the option of actually holding the item in our hand and evaluating its value and condition.For eBay feedback for this type of buying is best posted when the the buyer has the item in their hand and can evaluate that it was described properly, not damaged in shipment and received in a timely manner. eBay stores are like mail order houses. when we buy from a mail order house and the item is received in good condition we go our merry way and happy with our purchase. However, if the item arrives damaged as a buyer what do we do. We contact the mail order house and tell them it was damaged and would like our money back or a like item.It all boils down to communication between buyer and seller and the preferences of both the buyers and sellers, and eBay should allow buyer and seller to decide who they wish to do business with. If eBay allowed this type of feedback procedure they would soon find out which is more popular to their venue. Perhaps both would be equally popular.
Wow, wonder what people think about this now that eBay’s new CEO has rolled otu this horrible new system of fees and feedback that is going to destroy the eBay selling community (those that actually pay the eBay fees). Sell your eBay stock now. I am not some crackpot selling Star wars figues on eBay, we run a multi-million dollare a year internet retail company on various venues (eBay, Yahoo Stores, etc.) the eBay neighborhood is about to take a serious downturn. Bank on it.
eBay Rocks. I Hope 2008 will be the best year for eBay with innovations and +ve growth factor.
On Mercado Libre, an eBay site from South America their feedback system is setup so the buyer and seller each leave feedback for each other, but it’s not posted on each other’s feedback pages until both have left it. When the buyer leaves a negative feedback for the seller, the seller won’t know and may post a positive because the buyer was good. This system would vastly improve the feedback system and be fair for all.
They also need to eliminate dutch auctions. No one understands how this system works and it really confuses buyers who are bidding on them. They should only keep fixed price multiple item auctions because it’s clear to the buyer what they are paying when they bid.
EBAY needs to take a more agressive stance when it comes to unscrupulous sellers who abuse the feedback forum. A stategy some of them use is to automatically retaliate with a negative if a buyer dares gives them one. By establising a reputation for doing this there are many who will not give a deserved negative in order to avoid getting one. Also if it is a EBAY user that has only a small number of transaction they know statistically they will take a big hit just for one negative. These sellers who are doing this usually have less than 98% positives and are using duress
in order not to lower their percentage any further.
Congrats John and Best Wishes Meg! 2008 is the year that eBay will shine!
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Wall Street watchers think of capital markets and financial players out west as being on the "other" coast. That's not how it's viewed in the Pacific time zone. From the venture capitalists of Sand Hill Road to the bond kingpins of Orange County to the corporate finance department at a certain software company in Redmond, Wash., there's plenty going on "out there." Adam Lashinsky should know. A native of Chicago, he has covered West Coast finance for a decade, with an emphasis on money matters in Silicon Valley. If it involves money and it's happening west of the Mississippi, look for it in Go West. 
I believe in ebays changes.
If you see a graph or stats on e-commerce trends in the past 1.5 years, e-commerce is doing very well considering all other economic factors. Up some 15%.
Who wants to drive 15 miles to the store and spend $8-$10 in gas to pay a high retail price with store pressures, no guided reviews and sometimes limited product selection.
Ebays changes have revolved around a few different issues and the users are unable to see the light ..just yet.
1) Feedback changes – were being abused like crazy. Too hard to tell a legit seller from a one whos not when they pay $10 to remove each negative feedback to boost their score. Even if they get them to agree to remove, the risky experience to the next customer is still there.
2) Best Match and search results core – no one likes typing in “motorola v3″ and getting 109,652 results. Users want to find what they want fast. Will it take some time before it’s 100%? Yes …but it cant happen overnight and it’s already starting to separate bad vs good.
3) DSR – Those who are complaining dont see the other end of the spectrum. Their competitors that are thriving have the same rule against them. Why are they selling more? They’re doing the BEST they can in customer service, returns and post sales transaction handling.
I say give it some time, mid 09′ or earlier …the market will level off and those who have decided to leave will be gone and the legit sellers who pride them selves by thinking “customer first” will be leaps ahead of the others.
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