eBay marketplace reverses revenue shrinkage
Well, then. The economy must be fine
eBay's bread-and-butter marketplace business is growing again. In the fourth quarter, the company recorded $1.5bn in marketplace revenues, a 15 per cent leap from the previous year.
This - along with another beefy quarter from PayPal - helped boost total Q4 revenue to $2.4bn, a 16 per cent increase from the fall of 2008, when the worldwide economy was in free-fall.
"We delivered a strong fourth quarter with double-digit revenue growth driven by exceptional performance at PayPal and turnaround progress and momentum in our core eBay business," reads a canned statement from eBay cheif John Donahoe.
"We are starting 2010 with significant progress against our three-year growth strategies for PayPal and eBay and a clear focus on our priorities going forward."
The company pocketed profits of $1.36bn during the quarter - a nearly 300 per cent increase - but much of this was due to its (partial) sale of Skype. eBay sold most of Skype in November for a net gain of $1.4bn, but the company still reported Q4 revenues of $112m from the voice over IP service.
If you exclude Skype from eBay's Q4 2008 and Q4 2009 revenues, growth reached 19 per cent.
The company's Payment unit - i.e. PayPal - reported revenues of $795.6m, a 28 per cent year-on-year increase. Net total payment volume - aka TPV - was $21.4 billion, a 34 per cent leap.
With economy in meltdown at the end of 2008 and through much of 2009, eBay saw revenues shrink for three straight quarters. But this unprecedented streak ended in Q3.
Third-quarter profits fell 29 per cent to $350m. At the time, the company attributed the drop in part to a weaker US dollar and its "continuing shift to faster growing, lower margin businesses," and now, profits are on the rise again.
For the full year, revenues rose 2 per cent. And eBay has now upped its predictions for the first quarter of 2010, expecting sales of between $2.1bn and $2.2bn. ®
eBay is not very good with figures
eBay say it has 233m members but if you read the small print then this 233m soon becomes 14m for the UK and you could add 20% more for the USA but this still leaves you a very long way from eBays 233m figure.
eBuster put the total for active members at about 33m members.
and that includes all the shill bid accounts and accounts set up for nothing more than selling feedback and if you think these are small numbers then take a look here were 1000's of feedback adverts are listed.
or here where we have a bidder with just 6 points retracting 275 bids
or this one where a bidder has 72 bids with the same seller.
eBays responce is to cook the book when they have been caught out.
but Google cached pages saves the day.
Take a look at 'Books Fiction' on eBay UK and it says it has about 2.5m items listed so if you take 2.5m and divide by 15 days and 200 items per page then you should see about 833 pages of these books each day but the highest page you will get to is about 251 and it will show items are ending in about 23 hours time if ordered by 'Ending soonest' so where are the other 500 pages.
eBay says crime only accounts for something like 0.01% of items and it is doing all it can to help members so how come i can write software with limited access to data that spots gang activity a mile away.
eBay is doing all it can to hide data and will not answer why bidder in the UK are all called bidder 1-20 and the USA has two digit alias and not a ten digit unique alias but i think we can all work that one out for ourselves and now if you take the time to look at the bid history for cars you find a page full of new members and yellow stars.
Sorry but eBay can not claim to have masses of loyal members if none of them are bidding and any figures from eBay must be taken with a large pinch of salt.
Free Postage Scam?
So the increase in revenue is nothing to do with the fact that ebay have introduced mandatory "Free Postage" on the most popular seller categories?
Previously, sellers would be able to mitigate for the money they lose on the transaction due to ebay and paypal fees by building a small contingency into their postage costs (OK not so small with some sellers!)
Now all sellers have to include the cost of the free postage in their start price - so whereas previously you could offer something at an attractive 99p start price and if it only had one bid you weren't out of pocket because you had the postage covered separately...now you have to start your auction at say 3.99 so that if it only attracts one bid then you make enough money to cover the postage AND fees
Of course the ebay final value fee has never included the sellers postage costs (hence the scam where an occasional seller who would offer something for a few pence but then charge the actual value as the postage)so now ebay have forced sellers to increase the start prices and therefore increased ebay's slice of the pie substantially.
It's not a sign of a recovering economy, or an indicator of consumer behaviour - it's just a case of ebay changing their pricing model to squeeze the maximum cash out of sellers and buyers
Re: eBay: Dead Man Walking
Surely ebay is a platform, you will get people exploiting anything they can, there are lots of baddies out there. I admit that not doing anything about known exploits is probably criminal but there are other precedents like not blaming ISP's for 'supporting' child pornography, as long as they shut down illegal sites when brought to their attention.
PS I think Paypal's brilliant, I just hope no-one hacks it.