Mr. Donahoe - What's Ebay Going to Be When it Grows Up?

Watercolor: "Cupcake Party"

Ebay's success came from the little people...buying, selling and becoming a community. Buyers had their favorite sellers, sellers of worth had a following of buyers....and so the cycle of buying and selling goes.

Actually, back in 2004 Ebay began to pare down the strength of auctions. First with the deletion of "Going, Going, Gone" and then the take over of the option feature plus that single handedly dominated many categories, computers, electronics, art, etc. Ebay at that point began to move away from auctions - undoubtedly Meg's idea. The idea of Ebay Express was a stab at fixed price listings but was so poorly thought out and executed -it was bound to fail.

2008, enter John Donahoe - Meg's handgroomed replacement who began to put into place a half-baked plan that was probably cooked up by the two of them. Let's shape Ebay into an Amazonish businessmodel! Well, it took a year for Mr. Donahoe to discover you can't simply change a business model and have it succeed.

Since the "Amazon" plan went into effect, Ebay set buyers against sellers with its feedback and DSR innovations. Ebay upset the balance of buyer/seller and, with countless new and outrageous policies made Ebay a hostile place for small sellers and for many powersellers as well. Thousands of small sellers left...leaving their following unable to find what they were accustomed to buying on Ebay. Sellers who left never came back to Ebay to buy either....then the disastrous 4th quarter holiday season report last year where Ebay declined 16 percent. Right then....John Donahoe and his team should have been let go and a team experienced in online sales AND customer satisfaction should have been brought in to replace them.

At this point Donahoe is outright fishing...first he says they're going to be the world's biggest retailer then at his bright and shiny Analysts Day he claims he is not a retailer but will be more like Overstock, selling end lots and discontinued wares. He pushed Paypal (I suppose so he didn't have to do a whole bunch of explaining about Ebay's core) on everyone and now claims it will be the biggest invention since fire! Anyone who ate that pap wasn't worthy of their job title. Unfortunately the wrong man is in the wrong job, combined with a board of directors who seem to be oblivious, and a multi-billion dollar company and its customers (the SELLERS who pay the bills) are suffering!

As Ebay's attitude says...."let them eat cake" so I thought I'd give you all something to munch on. My painting today is entitled "Cupcake Party"

Ebay's Analyst Day - Nothing New

Watercolor: "Red Woodroses & Lilacs"

Wow! What can I say about Ebay's Analyst Day? Some blogger already put it into one sentence: "Nothing new here - move on". That's about it in a nutshell. Lots of posturing by the speakers and lots of promise for the future and lots of selling so many millions of items a day, per minute - I call them fish stories. You know that fisherman who actually caught an 8 inch fish retelling the story as a three foot fish. In this case though - they are making fish stories around the slow and steady decline of a once mighty company. They are trying to put the blinders on analysts...will they be stupid enough to fall for it? Ebay's management team has succeeded in several things - none good:

1. They succeeded in arriving at the first decline in a quarterly report...and it happened in last years 4th quarter!!! If you can't succeed during the holiday season then you can't succeed...its as simple as that.

2. They've succeeded in driving off thousands of small sellers. The very sellers who attracted buyers through selling their rare, vintage and unique items. The things that could NOT be found in any store.

3. In driving off small sellers they also succeeded in driving off a buying force - since sellers also buy on the site. Secondary - they drove off buyers who frequented these sellers - both can be found on smaller sites.

4. They made it almost impossible for buyers to find what they're looking for. With Ebay's new Best Match - even the inventor of it said it was never intended to be the only search!

5. With Best Match Ebay has succeeded in manipulating search so that the buyer sees what Ebay wants him to see....small sellers are often so buried in the listings that they are forced to go elsewhere.

This is only 5 of the points Ebay's new management team has succeeded in doing in the past year alone. I would say they were let off pretty easy at only getting their pay frozen to last year's standards. I would have offered them $8.75 an hour - take it or leave it!!!

It is clear to me that Ebay is headed pell-mell towards that cliff. Its almost inevitable now that they will fall and fall big. Perhaps that is what is needed in order to bring them down to the size they've earned. Perhaps that's what the board has to see in order for it to come to its senses! Right now they are a failure to most sellers and certainly to small sellers. Their reputation is so tarnished by their treatment of sellers in the past year that that alone could cause their continued downfall no matter what they do at this point. Even if they turned around completely - word of mouth will continue - lack of faith in the company will continue for many many years! Can Ebay outlive its reputation?....I think not.

A good start would have been firing the present management team...but that just isn't going to happen. All we can do is wait and watch....like that guy standing out on a ledge 20 stories up...will he jump?....we all hope not yet he moves ever closer to the edge... :-(

My painting for today is a watercolor: "Red Wood Roses and Lilacs"