January 3rd, 2009 — eBay News and Talk
How big of a mess was it? Well, get yourself a coffee and let's see if we can find anything even mildly amusing about what happened in 2008. Like the presidential election, the theme seemed to be "Change" at eBay too.
I know a lot of it's depressing, but work with me here...
January
Meg announces plans to leave eBay and announces John Donahoe as her successor on January 23rd. On the 24th, Meg arrives at work to find John in her cubical spinning in her chair and singing "If I Had a Hammer."
John Donahoe's first bold move. After Bill Cobb loses an arm wrestling contest, John makes Bill announce lower fees and higher seller standards. The announcement also includes drastic changes to the eBay Feedback system. His theme is "we upped our standards, now up yours."
In the same announcement, Bill Cobb says he's leaving eBay. Many suspect he want's to devote more time to making his famous salads.
Best Match is introduced as the default sort view in five categories. This immediately results in an increase in sales in five totally unrelated categories.
(Adj stock price $26.89)
February
Sellers organize a February 18th boycott due to changes announced in January. Probably the best organized boycott of eBay to date, due to the fact that John Donahoe evidently supported it. Speaking about the "bold changes" that he intends to make, CEO-elect, John Donahoe indicates he expects some "noise" along the way.
(John was reportedly advised to remove a large hand-painted poster from his office window which read, "Let's make some noise!")
Senior VP of Evolving Policy, Brian Burke, announced buyers and sellers would receive Feedback credit for repeat business.
eBay Motorhead, Rob Chesney announced to the world that over 3900 GM dealers could list their Certified Used inventory on eBay Motors in the U.S.
New category-specific pricing was introduced in media categories. Sellers pay different amounts to list an item based on the item's category. In true eBay form, 3900 GM dealers tried to list their inventory under "Rare Books."
After countless hours, engineering costs, and high expectations, eBay Desktop was finally introduced and deemed "slick and easy to use" and was never heard from again.
(Adj stock price $26.36)
March
Best Match becomes the default method for sorting search results. Sellers inquired just what eBay means by "Best" and found the creator of the concept is from the planet Htrae (Earth spelled backwards) in Bizarro World from the Superman comics. Their Bizarro code explains it all:
"Us do opposite of all Earthly things! Us hate beauty! Us love ugliness! Is big crime to make anything perfect on Bizarro World!"
Senior VP of Evolving Policy, Brian Burke was back with a ban on digital products. The reason stated was that "digital goods are often produced at little or no cost to the seller..." among other things - and this allowed for feedback manipulation. He then had to explain why eBay charges so much for their digital product since it costs so little to make.
As a result of the ban, eBay is responsible for increasing the "carbon footprint" of millions of users. Rather than use the internet as intended, sending information electronically, sellers will have to create CDs, with labels. They will then have to put the packages on exhaust belching trucks and have them delivered by "snail mail." San Jose is not that far above sea level. Hey eBay, when the polar ice caps melt thanks to this stupid policy - well, let's just hope you have a French drain in your basement.
Harking back to the charm of the "old eBay," two sisters from Virginia, Emily and Melissa McIntire, list a Kellogg's Frosted Flake shaped like the State of Illinois. They say they'll use proceeds from the auction to buy more Frosted Flakes. "We like cereal." said the sisters.
The McIntire sisters' Frosted Flake is removed by vigilant eBay staffers after it was determined the auction was in violation of eBay's "food policy."
The intrepid girls re-list the auction by offering a "coupon for a Frosted Flake shaped like Illinois" rather than actually listing the flake itself. The auction ended with a winning bid of $1350. After deducting eBay and PayPal fees the girls were able to buy one new box of Kellogg's Frosted Flakes cereal.
eBay Ink begins it's run as eBay's "blog for the people." Richard Brewer-Hay was hired as eBay's blogger and promised transparency and honesty. The blog's three readers report that he is indeed as promised.
eBay brings it's affiliate program in-house, taking it away from Commission Junction. The new program is called the eBay Partner Network. Affiliates promoting eBay products are forced to migrate all their current links to a new format. In other words, every affiliate link ever used on a website or blog has to be changed - mostly by hand, within one month. Angry affiliates planned to storm eBay's San Jose, California headquarters with pitchforks and clubs, until most had trouble getting them through airport security.
Due to the high number of fake Second Chance Offers, eBay masks buyer's user IDs on all auctions. (Ironically, masks are usually used by the perpetrators of crimes in the United States.) This decision causes scammers and phishers around the world to boycott. John Donahoe was told in advance that he should not take part.
eBay Live! registration opened for Chicago.
Shipping Maven, Kristina Klausen announces upcoming changes in shipping requirements that will affect sellers. Shipping charges will be figured into the Best Match equation and will affect where seller's items appear in search results. Additionally, sellers will be required to state shipping prices for their items in the near future.
March 31st - John Donahoe officially takes the reins at eBay. Upon taking the reins he realizes he is not on a horse which causes big laughs around the office.
(Adj stock price $29.84)
April
eBay sues Craigslist for no apparent reason.
theStreet.com reports eBay's growth is flat and listings are only up 4%. Their Q1 earnings call confirmed that PayPal is really keeping them afloat. John Donahoe insists what is needed are more changes. John demands everyone sit in a different cubical every day for a month. He declares this bold change to be disruptive and innovative.
The 3 millionth vehicle is sold on eBay Motors on April 17th. It was sold to a British businessman who offered to send a money order for the full amount + shipping. The seller should deposit the money order, and send the amount for shipping to the U.S. agent...wait a minute...this sounds familiar.
Meg Whitman joins John McCain's campaign team. Craigslist sues John McCain.
Sensing the winds of change...Steve Lindhorst releases
Selling on 'The River' - the eBay Seller's Guide to Amazon.com which sells thousands of copies in 2008. "The River" being a term used on eBay discussion boards to thwart eBay sensors not knowing that the Amazon is a river. Ahhhhh. I get it.
(Adj stock price $31.29)
May
Feedback changes announced in January go into effect. Neutral comments are now counted as negatives and perfect feedback scores are as rare as Diamond Powersellers. Additionally, sellers may no longer leave negative comments for buyers.
As feedback scores plummet, Brian Burke takes the mike and explains. A neutral is not a positive and so is therefore a negative. Get it? It makes perfect sense. He also tries to explain how eBay feedback scores are calculated. The old way looked something like this:
While the new, improved way looked more like this:
Explainer of eBay Policies, Jim Ambach announces the removal of restrictions against choice listings, and multiple listings. On the other hand, he announces changes to eBay's Links Policy - no third party links allowed, and no email address allowed. This even applies to the sacred About Me page.
In Berlin, two parents post their baby on eBay for 1 Euro. It's listed as "nearly new" and "28 inches long." Also it's said to be "too loud" to keep around. Not sensing the humor in this listing, child protective services arrive and take the child and the parents are arrested. Shortly thereafter, the baby was indeed found to be "too loud" and the parents were released to take it back.
On May 5th, President of the United States of eBay, Lorrie Norrington announced there would be no eBay Live! in 2009. Plans were on for eBay Live! 2010 in Orlando, Florida. Based on the 2008 attendance, the event will be held in the local Fridays restaurant, and the entertainment may be Murph and the Magictones. But I digress...
(Adj stock price $30.01)
June
eBay Live! 2008 kicked off in Chicago. Even though it was considered by many to be the least exciting and lowest attended eBay Live! ever - President of the United States of eBay, Lorrie Norrington quipped, "the energy is great, I've never felt more connected to the eBay community!"
I muscled through the crowd and snapped a Polaroid of the action at the registration desks on Thursday morning:
See what I mean? To top it all off, most of the people in the photo are employees. John Donahoe was there but he was out on the front sidewalk getting an orange Alibaba bag.
Lorrie Norrington discussed selling her shoes in front of throngs of people, then investigative eBayers found out she didn't disclose the fact that she was an eBay employee as required. Oh man. She should have also disclosed that the shoes really were ugly.
John Donahoe shared family photos with the crowd, in an attempt to humanize himself before an angry mob. Unfortunately his soft-shoe number was missed by most when eBay Live! attendees rushed out of the room to get collectible pins upon hearing Frank Sinatra sing "Chicago" over the public address system for the 452nd time.
Beginning in June, users can now "watch" up to 200 items on their My eBay page. This was especially helpful since it has become nearly impossible to find the same item twice using Best Match.
Speaking of the My eBay page, a beta test began which consisted of two groups. One group could opt out of testing the new design, and the second group was forced to use it. For those who did opt out - a quick trip to the gulag was all that was needed to make them come to their senses. "We know what's best for you." was repeated over and over.
Hermès wins a lawsuit against eBay claiming eBay doesn't do enough to prevent counterfeits from being listed on the website. So I'm assuming everything you see here is real - buy something today:
eBay's GivingWorks program hit a milestone of $150 million raised for charity. Bravo!
(Adj stock price $27.33)
July
A lot happened in July...
eBay loses a case to Tiffany. Something they weren't all that concerned about until they realized they were not dealing with the 1980's teenage mall-singer.
Around the same time, in France eBay lost another court case due to failure to control counterfeits. The winner was LVMH (Louis Vuitton / Christian Dior) and the judgement was for $61 Million. (Unfortunately, that kind of tempers the celebration over the GivingWorks thing above.)
eBay called the amount "totally ridiculous" and demanded to deal directly with Louis in person, until they were told he died in 1892. They then asked that the case be thrown out on the grounds that they weren't dealing with a genuine Louis Vuitton.
In other legal news, eBay Australia finally dropped the idea of having everyone pay exclusively with PayPal (thanks to pressure from the Australian Competition & Consumer Committee). eBay staffers touched the hearts of their audience at a "Town Hall" meeting in May with this analogy, "We're not allowing people to offer unsafe choices, just like in this democracy you can't go out and buy heroin on the streets." So, not using PayPal is dangerous - like buying heroin on the street.
To make it seem as if the eBay staffers had not made an error in PR judgement, PayPal's new slogan became: "PayPal - the "Methadone Clinic of eCommerce"
After getting a sling and five smooth stones, Craigslist sues eBay in return for eBay suing Craigslist in February.
Buy.com began flooding the eBay marketplace with free listings, becoming the first "Diamond-level" Powerseller. Smaller sellers were outraged that Buy.com was getting a sweetheart deal on listing fees.
President of the United States of eBay, Lorrie Norrington announced that neutral comments in eBay feedback would not count as negatives after all. Unfortunately, this was only obvious to her after she sat in her driveway for three days revving the engine of her car with the transmission in neutral, going neither forward nor backward.
In other backpedaling news: Dinesh (Shore) Lathi chimed in with an announcement for all those sellers who spent two months revising thousands of listings to comply with eBay's new policies. "PSYCH!!! We're not going to require that specified shipping or enforce the new links policy yet! LOL! Sorry if it inconvenienced anyone."
Senior Director of Finding (I did not make that one up), Jeff King announced more people would be "directed" to the new "Search Experience" which is evidently not an amusement park near the Jimmy Hendrix birthplace.
Late in July, Trust and Safety Guy, John McDonald announced that that whole links policy thing was a no-go. "There will be no updates to the links policy at this time" said McDonald, who followed up with "E-I-E-I-O."
Finally, the City of Seattle, Washington listed five used self-cleaning toilets on eBay. They were removed from city streets because they reportedly "attracted drug users and prostitutes." Police departments from around the United States toyed with the idea of placing the toilets just outside their police stations, eliminating the need for dozens of officers and alleviating city budget problems.
(Adj stock price $25.17)
August
eBay tested a new item page design that gave the dozen or so sellers left a bigger picture of their item. They also allowed much more space to advertise other websites and items on sale by other eBay sellers.
A new pricing structure was announced that would allow sellers to list an item for 30 days, at a fixed-price, for only $.35. Evidently this was to celebrate the rollback of so many policy changes. Just in case anyone gets too excited though, Lorrie Norrington also announced that sellers who offer free shipping will get incentives. This puts even more pressure on sellers who cannot afford to offer free shipping, leading to more unhappy sellers. Additionally, Norrington announced shipping charge limits on media products.
(Adj stock price $24.93)
September
Barron's weekly reports eBay's business is "deteriorating" and predicts layoffs of up to 10% of eBay's employees. John Donahoe deflects questions about the report by suggesting that it came from the actual Red Baron and muttered something about Snoopy taking care of him.
In a symbolic move, eBay Pulse was updated, completely removing any usefulness from that great tool. After a week or so of complaints from the eBay community, a defibrillator was wheeled in and Pulse was returned to normal.
(Adj stock price $22.38)
October
Approximately 1500 people lost their eBay jobs in early October. Nearly 10% of eBay's entire workforce. It seemed a common thread in the layoffs had something to do with the number of bagels ingested on Wednesday mornings. What to do with all that money saved? Buy another company! In the same breath Captain John Donahoe announced the acquisition of Bill Me Later for $820 million.
In the Q3 earnings call, John Donahoe sets the tone for the Christmas season. Crummy. In an interview with the San Jose Mercury News on October 17, "eBay Chief Executive John Donahoe told analysts this probably would be a grim holiday quarter for the company. "These are turbulent times for which no one has the perfect playbook," Donahoe said, according to a Merc report."
While things are definitely bad and it seems Donahoe doesn't know what the heck he's doing, he should at least be commended for not ending a sentence with a preposition.
(Three days later, in an interview with theStreet.com, eBay CEO John Donahoe said he’s confident the company is "on the right path.")
In happier news, after an incredible number of rancorous meetings at eBay, the Dispute Console will now be known as the Resolution Center.
And for those sellers who dutifully jumped on their listings to revise their Return Policy and add the now mandatory Handling Time to their listings - PSYCH!!!! Again!! You got punk'd!!! You don't really have to do that until early 2009!
In new policy news, sellers will only be allowed to offer electronic payments. Checks, cash, and money orders are no longer permitted in listings as a form of payment. Does that mean Paypal only? Nope, sellers are allowed to use a service nearly no one has ever heard of called ProPay. That should satisfy the legal technicality of not allowing sellers a choice in payments, other than eBay's own company, PayPal. But ProPay is only open to certain sellers, there's a hefty monthly fee, and you can always hear people snickering in the background when you call them.
(Adj stock price $15.27)
November
eBay AdCommerce was introduced to allow eBay sellers to advertise their listings and eBay Stores via a text ad on eBay search result pages. Based on the success of eBay's new "finding experience," AdCommerce may be the only chance you have of getting people to see your listings.*
*It should be mentioned however that an elderly lady in New Hampshire was able to locate the Ark of the Covenant while searching for an electric ice crusher.
(Adj stock price $13.13)
December
eBay mercifully restrained themselves during the 2008 holiday season and didn't make any really big changes. Rumors are that the big changes for sellers are mostly over. Well of course they are. With so many sellers having "left the building" how many problems could there be?
The last policy change of the year came from Senior VP of Evolving Policy, Brian Burke. No more ivory on the site. That is unless you're selling a piano, or an antique with ivory inlays that was made before 1900.
How long will it be before we hear a story of a seller having their listing for vintage Ivory Soap ended due to
policy violations?
(Adj stock price $13.96)
Summary
As Obama takes office and John Donahoe learns to use a mouse, we look forward to 2009. Many have started their own website, many have moved over to the "River" - Amazon.com. Supposedly the big painful changes are over for sellers and there's a bright future ahead for all six of them.
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December 15th, 2008 — Product Trends
Know what the kids want this year? (Actually, I think it's the adults that want them, but they're saying they're for the kids.) Eyeclops Night Vision Goggles. You can see up to 50 feet in the dark with infrared technology. This product is a best seller on both Amazon and eBay and I think the kid in me knows why. This is a cool toy, and if you're looking for a last minute gift, you'd better grab this before it's gone.
Accessories include a bug vacuum, - wow - a camera, and an Eyeclops Bionic Eye which allows you to zoom in on objects at up to 400X magnification.
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December 12th, 2008 — Selling on eBay
I just read a post over at Seeking Alpha that explains some sellers are actually suing over negative feedback. I have to say, it's not surprising.
I've been selling on eBay again after taking the summer off. I sell on Amazon, eBay, Bonanzle, and eCrater. Guess where I have the most trouble? eBay of course. I handle all of my orders exactly the same, I print the labels, pack the items, and ship them all together, no matter where the sale came from. I use the same descriptions and photos on items that sell on multiple sites. The most questions come from eBay buyers. The requests for discounts come from eBay buyers, the emails asking where their package is come from eBay buyers, and the (undeserved) negative feedback? eBay buyers.
The most irritating thing about it is about half my sales come from eBay buyers. This business would be great if it weren't for customers.
Read the Seeking Alpha post...
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November 24th, 2008 — Selling Your Stuff
Are you in a funk over the economy? Lots of sellers are reporting lower sales this season so far. The changes at eBay have caused many sellers to try other channels, with disappointing results. The general economic news is bad nearly every day. Here are some things we know for sure:
- Increases will not happen by waiting for eBay to "come to their senses."
- Small upstart sites like eCrater, Etsy, and Bonanzle do not generate the same sales as eBay and/or Amazon.
- Sellers cannot depend on just one channel for income anymore.
Multichannel sellers have to focus on four areas to streamline and improve their sales:
- Platform - Lose the emotion and figure out the best places to sell.
- Products - Grow your product line
- Visibility - Make sure people see what you have to offer
- Customer Service - Be the best at what you do
I sat down to put some thoughts in a small report, and it turned into over 40 pages. You can get the ebook at no charge when you sign up for my newsletter (see below). Here are the ten points covered:
- Change the eBay-only mindset to a multi-channel mindset
- Pick the top three to five marketplaces, and learn everything you can
- Stay focused on business, it's not personal
- Increase your product line
- Get your products in Google Base
- Blog! (that's a verb)
- Build a list of regular readers
- Standardize your selling processes
- Standardize your policies
- Set up a "funnel" for customer service
It will take diligence and a cool head to make it in this economy. Many will fall by the wayside. If you work hard, and work smart, you'll still be able to do what you enjoy when things improve.
I hope you enjoy this eBook and I'd like to hear your comments.
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October 28th, 2008 — eBay News and Talk
No it's not a typo. I'm just really hip and in the know.
To begin, here's the definition of pwn3d from the "Urban Dictionary:"
pwn3d
1: Losing badly at something
2: l337 (online) slang for 'owned'
3: The mis-spelling of 'owned'
4: Getting showed up/embarrassed in a public event by someone/something
If you want to know what's going on inside a company, from the employees or past-employees, check out Glassdoor.com. Today the company plans to announce that it has raised $6.5 million from the venture capital firms Sutter Hill Ventures and Benchmark Capital, which spearheaded an earlier round of fund raising last year.
Benchmark's involvement may be entirely coincidental, but it's still interesting that Bob Kagle, a General Partner at Benchmark, sat on eBay's Board of Directors until June, 2008. He left for "personal reasons." But - let's connect the dots anyway.
Glassdoor is only four months old, and it seems to be doing quite well. They have information from insiders in over 14,000 companies already. eBay is one of the most talked about. This is where you can see John Donahoe's rating by the employees (it currently stands at around 23% positive - or 77% negative). The tidbits are quite juicy, and pretty much describe a company in chaos. (Insert sarcastic gasp of surprise here.)
I have been meaning to mention to my dear readers that I just recently remembered one of the very first things John Donahoe did when he first took over as President of eBay. The employees were all annoyed that his first "shakeup" was to have everyone's cubical moved. Incredible numbers of people were shuffled around, for no obvious reason to them. "Disruptive innovation" in its incubatory stages!
Okay, back to the story...
So, Bob Kagle, who is an extremely nice guy, helped bring Meg to eBay. He sat on the board for years as eBay grew. Now that eBay has been handed over to "the Disrupter," Bob is gone, and is now helping fund a company that is making its mark by exposing the idiocy that goes on within eBay. Brilliant!
One more point...
Glassdoor says it may allow companies a way for companies to contribute material to their pages on the site and to “manage their brand.” Though Glassdoor is ad-supported, CEO, Robert Hohman, does not rule out charging companies for some aspects of the service. “There are always two sides to a story,” he said. “What we want to do is give employers the tools to let them tell their side of the story, although we have a responsibility to remain committed to the truth.”
I think it's pretty funny that eBay has to sit by and get "feedback" from current and former employees, without having the mechanism to return it, or defend it. Sound familiar eBay? After all, we wouldn't want the people leaving comments on Glassdoor.com to feel intimidated about being honest. Hopefully, Glassdoor will not allow the "brand managers" in.
In any case, if you want some fodder for your blog, or you just enjoy reading eBay gossip, get a cup of coffee and visit www.Glassdoor.com. I'm tellin' ya - eBay gets pwn3d!
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October 21st, 2008 — eBay News and Talk
John Donahoe Quotes - a Year in Review
With the 2008 holiday selling season at our collective doorstep, we need to decide if we are going to go forward with our wagons hitched to eBay.
Rather than reading what I think though, look over the past year of quotes from eBay's fearless leader, CEO, John Donahoe. I invite you to choose your favorites, and add any actual quotes that I missed. Make sure to read all the way to the end...
September 27, 2007 – Legg Mason Capitol Management Thought Leader Forum By using a real focus on the customer, we embarked on a series of fundamental changes that will ultimately span a three year period. We started by creating a future vision. This was critical because not everyone felt the impetus to change, given the amount of success we were experiencing. There's a real push to keep doing what you're doing because it's working.
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We have such volume that many of our buyers said that there was too much abundance. They just want to buy a Nike watch and instead they get 12,000 results back. That's too many. They want to get to what they want, faster. We agreed.
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Based on our experience, here's how innovation at the core worked. We had to create a mind shift at our company-we had to think bold and not just incremental. We had to create a vision of the future so people could let go of a very successful past.
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We talk and listen to customers, but for this kind of innovation, customers don't always know what they want.
December 18, 2007 – Silicon Valley Insider "A year ago, we had 14 per cent of global e-commerce, we're the largest e-commerce provider, and our home page still looks like a flea market," he says. "The world around us had changed. In particular our buyers' experience hadn't kept up."
January 24, 2008 – NYTimes - “Today our buyers tell us that we know you have unmatched selection, but we can’t always find what we want and find values as fast as we want,” Mr. Donahoe said.
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“There is a lot of talk about Google’s relevance-based search,” he said referring to Google’s system of showing ads based on how often users click on them. eBay can use more information to provide better results, he said.
“On eBay we have data about what people actually purchased and bought. As we begin to capture and use that data, we believe we can provide the most relevant search experience that takes that inventory we have and delivers it to a buyer so they have good choice.”
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“There definitely will be those that are concerned or upset about these changes,” he said. “Our clear belief is what’s good for buyers is good for sellers, and is good for eBay.
January 25, 2008 – CCTV.com - eBay will weed out fixed-priced merchandise that's "not well priced" by providing it "less and less exposure", Donahoe said.
February 3, 2008 - from an AuctionBytes interview on eBay changes - "we have modeled out, if all sellers took their 2007 volumes and put it through the new pricing, the majority of sellers have lower fees.
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Furthermore we feel that the lower upfront fees and the other changes we made to improve the buyer experience is going to lead to higher conversion, so we think in 2008, all the sellers will have better growth and in essence, lower fees or a lower take rate.
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our analysis shows that one of the major reasons sellers or buyers buy less on eBay is they don't feel great about the shipping fees after the fact. So that's a challenge we have to jointly face with our sellers.
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So we have a very clear priority and focus in the coming year to improve the buyers experience on eBay because we think that's good for our sellers and that is good for eBay. And so we put the words out there, we are backing up our words with action, and yes, is there going to be some noise along the way? There is. Are we are going have to engage with our sellers about different dimensions of that? We are. Absolutely. The good news is all of a sudden there is a lot of attention on shipping and how we are going to end up having our buyers feel good about the shipping on eBay.
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The incentive for sellers to stay on eBay is that they are continuing to sell great volumes on eBay. This is so, again, we had the largest number of traffic in the 4th quarter.
February 4, 2008 - TheStreet.com - "We need to redo our playbook, we need to redo it fast and we need to take bold actions," Donahoe said at the conference. Now it's up to the sellers to take the ball and run with it.
February 6, 2008 "We're going to get very aggressive about making eBay easier and safer to use. The Net has evolved dramatically in recent years. Buyers have become accustomed to streamlined purchasing experiences that put a premium on speed, convenience and reliability. While we have made strides in these areas, I am clear that we need to do much more." – Knowledge@Wharton
March 3, 2008 – USA Today - "My commitment is to build from (eBay's) strengths and make the changes necessary in this competitive environment," Donahoe, a former Bain & Co. consultant, said in a conference call in January. "eBay's best days are ahead."
April 17, 2008 - CNNMoney.com - "As we expected, some of the announcements generated a lot of passion from our community," Donahoe said - "We stayed the course on the changes that we believe are critical for the overall health of the marketplace and the long-term success of our community of users."
April 21, 2008 – Arkansas Democrat Gazette - Donahoe said it is not the company’s intent to discriminate against small sellers. But, he said, “where large and small sellers are trying to cut corners and not provide a good buying experience, we are making less room for them in the marketplace.” Donahoe outlined some more changes to the site. In Australia, the company is testing a program that requires sellers accept only PayPal payments. Donahoe said that if the test were successful, the company would roll it out in other countries “in months, not years.”
July 17, 2008 – International Herald Tribune - "When you have 84 million active users, any time you make a change, someone is going to be upset," Donahoe said in a call with analysts and investors. "But we listen and we incorporate their feedback with what we believe is best for the collective good of the marketplace."
October 6, 2008 - Yahoo! Tech News - "While never an easy decision to make, these reductions will help improve our operations and strengthen our ability to continue investing in growth," eBay president and chief executive John Donahoe said in a statement.
The move will create a "nimbler and more efficient organization," Donahoe said during a conference call. It will "impact most parts of our company" but will result in approximately $150 million in savings starting next year, he said.
October 17, 2008 – CNNMoney.com - "We do see buyers moving toward sellers with higher ratings. However, this has not yet translated into buyers increasing their overall purchases on eBay," Donahoe said during eBay's earnings call. "Our current GMV trend is not where we would like it to be, but we remain confident that the improvements we are making will ultimately move the needle."
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"Buyers are increasingly buying from the highest rated sellers and buying less - in fact, they have stopped buying - from lower rated sellers," Donahoe said
October 17, 2008 – San Jose Mercury News - eBay Chief Executive John Donahoe told analysts this probably would be a grim holiday quarter for the company. "These are turbulent times for which no one has the perfect playbook," Donahoe said, according to a Merc report.
October 20, 2008 - theStreet.com - On a conference call detailing the Bill Me Later deal, eBay CEO John Donahoe said he’s confident the company is on the right path.
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October 17th, 2008 — eBay News and Talk
What would it be like if the eBay execs had an offsite to clear their minds? Maybe hunting! The fresh air, the great outdoors, the thrill of the hunt. Could these great minds handle it? Take a look for yourself...
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Have a great weekend!
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October 15th, 2008 — eBay News and Talk
What was all that mumbo jumbo? It was eBay's Q3 Earnings Call for 2008! Contrary to what John Donahoe said on CNN Money recently, it seems eBay's business IS down some.
Let's cut through all the figures and analyst jargon. Sales stink for most people. My friends, who used to regularly use eBay, now tell me they don't even think of eBay when they are about to make a purchase. They have either been burned, or the site is so complicated that they just go somewhere else.
It really sounds stupid when John Donahoe, and Bob Swan read their carefully worded, prepared statements telling us how confident they are in what they're doing. Just because they "believe" it to be so - does not make it so. It is absolutely amazing how out of touch they really are with the community opinion on Main Street.
Imagine a popular restaurant in your community. Based on a few complaints the chef decides to add more salt to the food. Now, people who used to enjoy the food find it too salty. As word gets around, fewer and fewer people stop by. Those who stick around, complain loudly.
What should the chef do to fix the food? More bold changes! More salt! Some cayenne pepper too! He's confident that this is what the original complainers wanted, it will just 'take time' for them to appreciate these bold changes.
Meanwhile, maybe placing ads for other restaurants on the menu will bring in some extra revenue. In fact that's a great idea! The revenue from the ads will make up the losses from the food! Brilliant!
What the brilliant business minds don't get is people come for the food. No good food, no one will see the ads.
John Donahoe keeps suggesting eBay needs more bold changes to get people to come back. Perhaps going back to the original recipe would help.
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October 2nd, 2008 — Education Specialists, eBay News and Talk
It seems like everyone thinks eBay's business is off. Except eBay CEO, John Donahoe. In a CNN Money interview yesterday he was asked several times by Poppy Harlow, "Is eBay losing business because of the changes?" To which he finally stated "No, our business continues to move forward in what is a very challenging economy."
"We're simply doing what our sellers have been asking us to do"
I don't mean to be unkind, but in his initial responses Mr. Donahoe's replies sound pretty "canned." Then he just says things that don't make much sense. I understand being on national TV can make a person a little nervous, but - well, here are a couple of examples:
When discussing fees, Ms. Harlow brings out that many are unhappy with the fee changes. She says, "You say prices are not higher when all is said and done, can you respond to the criticism some people have of the fee structure?"
Mr. Donahoe replies:
We're simply doing what our sellers have been asking us to do which is, lower the cost to list on eBay and pay more if an item sells successfully. So what we've done, is on our fixed-price items, we've lowered the listing cost on eBay, so that ...lowers the risk.
Then he says something that doesn't make all that much sense in my book. He says,
We've aligned eBay's incentives with theirs where they only pay fees if an item successfully sells.
There's always a lot of "aligning" and "incentivising" going on with him.
But anyway, next Poppy Harlow asks again, "has eBay lost any business because of the changes?"
Reply?
Any time there's a change, there's a transition."
Hold the phone! What? Change and transition go hand in hand?
Okay then, what was the transition?
Sellers are adopting to the changes.
(Here again, I don't want to be a jackass, but either they are adopting the changes, or they are adapting to the changes.)
We have plenty of examples where sellers...believe many of the changes we've made are exactly in the right direction."
Since he didn't answer the question, for at least the third time, Ms. Harlow asks, "So, have you lost any business from this?" To which Mr. Donahoe replies,
No, our business continues to move forward in what is a very challenging economy.
Well good. 'Cause I thought things were kind of getting screwed up. But everything is fine.
The reporter asks one more zinger at the end. "Any plans to sell Skype?"
We are very please with Skype as a business, and continue to grow it.
Maybe if she asks that question three times he'll finally answer it too.
If you would like to watch the interview for yourself, you can find it here: http://tinyurl.com/donahoe-cnn
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September 29th, 2008 — eBay News and Talk
John Donahoe was in Washington, D.C. to receive the National Medal of Technology and Innovation for Advancing Global Entrepreneurship. It must be a huge medal to have all that on it.
eBay is the first internet company to be awarded this honor. It is America's Highest Honor for Technological and Scientific Achievement. It appears eBay earned this medal for the work done up to 2007. I wonder what the medal will be called for the disruptive innovation John Donahoe has pursued since he took the helm as CEO?
"Our technology is at the core of our success," said eBay Inc. President and CEO John Donahoe, who accepted the medal on behalf of the company. "EBay and PayPal together have harnessed technology in the service of people; the result is that millions have transformed their lives for the better -- building businesses, taking care of their families and becoming global entrepreneurs at the same time. That's what true innovation is all about."
Mr. Donahoe accepted the medal on behalf of his company. Upon receiving the medal, he promptly offered to help President Bush with the current financial crisis. President Bush declined, citing Mr. Donahoe's low popularity. Rumor has it Mr. Donahoe then rushed to the U.S. Capitol to help on the bailout bill.
Okay I made that last part up. But it could have happened...
Read more about the medal here: http://tinyurl.com/49dofo
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September 29th, 2008 — PayPal Q&A
Would it be a serious problem if you lost your PayPal balance? What if it lost value as a result of the current financial climate?
(This information applies primarily to U.S. users. If you are outside the U.S., double-check to see if your funds are at risk.)
Since PayPal is not a bank, funds are not directly covered by FDIC (Federal Deposit Insurance Corporation). They are covered by what's called FDIC Pass-Through Insurance. But pay attention, if your funds are in PayPal's money market fund, they are not covered at all by FDIC and may lose value.
First, here's what's covered by FDIC Pass-Through Insurance, from the PayPal site:
You do not need to keep funds with PayPal in order to use our service. If you do hold a balance, you can do so in two ways: (1) PayPal, as your agent, will place your funds in a pooled account at an unaffiliated FDIC-insured bank or savings institution, which is eligible for pass-through FDIC insurance coverage; or (2) you can elect to earn a return on your funds by enrolling to invest all funds that you receive into the PayPal Money Market Fund. The PayPal Money Market Fund is not FDIC insured, not guaranteed by any bank and may lose value. PayPal keeps a record of the amount of your balances, which you can check by logging in to your account through the PayPal Web site at any time.
So the money market funds can lose value. If your funds are not in the money market, PayPal keeps your money in one of three banks. (Wells Fargo, Bank of America, or Comerica - California, U.S.A.). If one of those banks fail,
your balance placed at the bank would be subject to FDIC pass-through deposit insurance coverage, along with any other deposits you hold at that bank, up to a total of $100,000.00 USD. Pass-through deposit coverage is contingent upon PayPal maintaining accurate records and on determinations of the FDIC as receiver at the time of a future receivership of any bank at which we place your funds.
The only way your funds are protected by FDIC is if they are not in the PayPal Money Market Fund. If that makes you nervous, you can close your PayPal Money Market Fund, and have PayPal keep your funds in an FDIC insured bank by-
- logging into your PayPal account
- click "Profile"
- click "Money Market Fund"
- click "Close Money Market Fund"
It will take a little while to get this done, so plan ahead. The bottom line is your funds are covered by FDIC if they're not in the money market fund.
There is one other thing PayPal says:
FDIC pass-through deposit insurance protects you only against the failure of the bank at which PayPal places your funds, and does NOT protect you against PayPal's insolvency. Through the terms of our User Agreement, we believe that your funds will also be protected from any claims of PayPal's creditors and will be returned to you even in the unlikely event of a PayPal insolvency.
It seems like the most reasonable thing to do is scrape your PayPal account regularly, into your bank. At least there is one less layer between you and your money. Keep it simple.
Here is the direct link to the PayPal-FDIC page: http://www.paypal.com/cgi-bin/webscr?cmd=p/gen/travelers-outside
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September 26th, 2008 — Education Specialists, Niche, Popular, eBay News and Talk
John Donahoe is less popular than President George W. Bush. The President took years to get to this point, Mr. Donahoe accomplished it in just one. Exactly one year ago this weekend, Mr. Donahoe was a guest speaker at the Legg Mason Capitol Management Thought Leader Forum. The topic was "Disruptive Innovation," and Mr. Donahoe spoke about his plans for eBay. Let's see how he's done. It get's better the farther you go, as I get more frustrated and sarcastic. This is a long post, get a donut. I'll wait. The following contains actual quotes from Mr. Donahoe's speech. At the bottom of this post, I've included the "concept cards" from his presentation that can be found on the Legg Mason Capital Management website. Oh and along with my sarcasm. Feel free to add your own.
The topic of disruptive innovation and the history of eBay have a lot in common. In many ways, eBay itself was a disruptive innovation. All three of the major businesses that are a part of eBay are disruptive innovations. I'd like to spend a little bit of time talking about how eBay got to where it is and then talk about how we approach innovation going forward. Today we're dealing with phase two or phase three of disruptive innovation. We've had the disruption, now we must disrupt our own disruption. That's part of the challenge.
Okay, does he know which phase we're in? Because that seems like it would be important. And this sentence, "We've had the disruption, now we must disrupt our own disruption." reminds me of the guards in Monty Python and the search for the Holy Grail, see what you think:
Other points made by John (can I just call him John?) are found here when he talks about the idea of "disrupting" a successful business (no I'm not kidding):
We set out a year ago to think about how we could change before we are forced to change. We took a good look at ourselves in the mirror and didn't like everything that we saw. We saw a very successful business and a lot of momentum but we saw that our user experience and ability to satisfy our buyers and sellers wasn't what we wanted it to be. By using a real focus on the customer, we embarked on a series of fundamental changes that will ultimately span a three year period. We started by creating a future vision. This was critical because not everyone felt the impetus to change, given the amount of success we were experiencing. There's a real push to keep doing what you're doing because it's working. We dove deeply into an understanding of our customers, their needs, their unmet needs, and their alternatives. We had to confront some sacred cows. These are often some of the most difficult things to handle. They're perceived as values of the company. For example, we talk about the level playing field. We treat every seller the same. Now, the level playing field really means that the little player shouldn't get shut out. It was never intended to mean that we treat a bad seller the same as a good seller. Intermediation is another one. It doesn't mean that we can't intervene to make a better buying and selling experience. We also had to address some of the cultural and organizational dimensions.
Okay, looking back on a year of this "innovation," let's reflect on how things have gone. They completely admit to fixing something that wasn't broken. They just wanted to fix it before it was broken. "A very successful business and a lot of momentum" was pretty much slowed down and made not nearly as successful. He also refers to "our buyers and sellers" which is really interesting, since in this very speech he emphasizes that eBay is just a platform and not a retailer.
And I'm sorry John, those "sacred cows" are not just "perceived" as values of the company. eBay told us those are the values of the company!
Take notice of the part where he says, "We dove deeply into an understanding of our customers, their needs, their unmet needs, and their alternatives." Their unmet needs? I have been saying on this blog that eBay has turned into a company that feels they know what you need more than you do. This proves it. How's that workin' for ya?
Look at the next part, and think back over the last year. Think about how eBay is meeting your "unmet needs" with things you didn't even ask for in regards to "finding." Before you read this - ask yourself: Does this sound like a person that uses eBay? :
One of the most fundamental activities is "finding", or what most people think of as "search", on eBay. Historically, the core part of our business model started with a search and the results came back with time ending soonest-the items that are ending soonest at the top of the list. That makes sense during auctions because at the last minute you want to bid and win. Today over 40 percent of the items on eBay are fixed price. We have such volume that many of our buyers said that there was too much abundance. They just want to buy a Nike watch and instead they get 12,000 results back. That's too many. They want to get to what they want, faster. We agreed. There's a lot of talk around the Internet about relevance engines for advertising. Nobody on the Internet has more close transaction data than eBay or PayPal. We have the opportunity to build the best finding experience there is. We weren't collecting the data in a way that we could use it, so we had to change that. Tinkering with the finding experience is also tinkering with one of the core jewels of eBay. But we recognized that eBay has more product searches than any other property on the net, including Google. We convert single digits from searches to bids or buys-a fairly small percentage of those searches-and all we have to do is move that by a fraction to have a profound impact on our company. Over the last eighteen months we have set out to make a series of incremental improvements in our finding functionality. We bought Shopping.com, which is a great destination site but also brought us great finding and search technology. We experimented with eBay Express and built a separate parallel site to experiment with relevance-based search. We went completely with relevance-based search in Korea. Finally, we began layering in something called "best match" into our core site. Those of you who use eBay, if you look in your search box, you can select best match as an option which will help you get to the items you want more quickly. Finding is a core area that we're going to launch a series of improvements in during the next few months.
I KNOW!!! Here are the roots of the broken finding system on eBay. (By the way, the term "Nike watch" only pulls up 1,804 today.) "Too much abundance"? wow - sorry John, I thought you wanted us to list on the site.
He pretty much admits eBay Express was an experiment to tinker with the search technology. Then talks about relevant search. Relevant search is once again saying, "we know what you want better than you do." How would you like this? You go to Macy's and ask for the necktie section, and instead of the clerk letting you shop, she comes back with five neckties from which to choose. When you ask to see them all, she says "there's just too much abundance over there, these are the Best Match for you."
In this next quote, notice the philosophy being promoted. Would you like working at a place like eBay? Evidently, according to GlassDoor.com, only 28% like it right now... Oh, and see if you can find yourself anywhere in this equation:
Based on our experience, here's how innovation at the core worked. We had to create a mind shift at our company-we had to think bold and not just incremental. We had to create a vision of the future so people could let go of a very successful past. We had to understand that this wasn't going to just happen overnight. While we're doing this, we're running a successful business. We need to drive these principles of disruption at the same time that we're executing a very successful business. Second, we have to look at all parts of the business model-the whole end-to-end user experience. We're using our global portfolio to test and learn. We're testing ideas in Korea, France, Italy and elsewhere around the world. We're testing various pricing mechanisms. All of this requires new infrastructure, whether it's new data, testing or advertising capabilities. Finally, even I may have underestimated how important organization and culture are. Antonio [Perez] talked earlier this morning about needing to get rid of 70 percent of the people to change a culture. We don't have that luxury. We're growing at 30 percent a year. We need to build on the team we have and help shape the momentum in the right way. We had a bit of a restart with our vision. We set off on this and the senior team was all aligned. But we hadn't invested enough in the rest of the organization. So last year in the fourth quarter we took our entire organization through the process.
"Let go of a very successful past"? Wow. They're delivering on this one.
I also like the part he says about "executing a very successful business" - poor choice of words John.
And they have solved the "growing at 30% a year" problem. Now they can focus on getting rid of 70% of the people to change that pesky eBay culture. A year after this speech, is the senior team all still aligned? Well, now that some have departed, I don't think so. And besides that - aligned with whom? The other members of the senior team? or the community? employees?
Okay, here's another quote. This is the last one I'll share, because you can read the entire speech for yourself if you'd like. This one is cute. It tells how eBay is willing to churn out new products even before a business case has been made for that product. In other words, people dream stuff up, they put it on the site, and we either like it or not. Imagine what cars would look like if automakers did the same thing:
We're providing a forum to bubble-up ideas. We have a skunk works in-house. We're creating lightweight, cross-functional teams. We're giving the teams the freedom to focus on the right user experience and then worry about monetization. If we ask for too firm a business case up front, they'll never get out of the gate. We give them the space and energy to move aggressively and we use user adoption as the metrics in the early days. We talk and listen to customers, but for this kind of innovation, customers don't always know what they want. No one would have asked for a widget, but when they saw it they liked it. There's a real balance between being customer-driven and going with your intuitions. We also put the right people on the team - not everyone can do this kind of innovation. We are acting like internal venture capitalists with our resources. We give them just enough to get to the next round. We also know when to cut them off or keep them going. Finally, we involve people from the core business in these ideas, but not too early in the process. People in the core business typically want to kill these things when there's a tight quarter.
Really John? "Customers don't always know what they want?" How would you know for sure if they can't find it? So let me understand, the customers are saying what they want, not getting it, and leaving. Sellers are unhappy, buyers can't find things they are searching for, and eBay has people inventing new things that haven't been asked for yet? Brilliant! I feel so disrupted.
Does anyone know if John is speaking at the Thought Leadership Forum again this year?
UPDATE: Someone posted a link to this post on the eBay discussion boards early this weekend. Evidently, eBay has deleted the entire thread. If you'd like to see what they found so offensive, you can look at the cached version here: http://tinyurl.com/3lrgac
Here are the "Concept Cards" from the speech (click them to enlarge):
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September 25th, 2008 — Uncategorized
Tonight only, September 25, 2008 from 5PM to 8PM - Cold Stone Creamery is offering free ice cream in honor of their 7th Anniversary. You can find the location nearest you with their store finder here www.coldstonecreamery.com/store_locator
If you're too late for the free ice cream - check out these cool vintage ice cream items:
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September 23rd, 2008 — eBay Announcements
After a great outcry from loyal eBay Pulse users - it appears eBay has rolled back the changes to make some adjustments. I posted twice about the changes on this site, and the eBay discussion boards have been lit up with complainers. Dennis G. (Dennis Goedegebuure, eBay Marketing?) posted this comment on my most recent post about eBay Pulse:
Based on community feedback, we have rolled back the old pulse for a limited time. Until the application is live, we will build in the needed functionality for drill down in categories for detailed information in the new pulse pages.
Until then, you can find the new pulse at http://new-pulse.ebay.com
Kind regards,
Dennis
The fresh look is nice. Even the Internet Pulse sounds nice, but most users are upset that the ability to see the top searches within sub-categories was removed. It appears eBay is working to fix that.
It sounds like Dennis listened and is working to make users happy. In light of many unwelcomed changes over the past year - this is really refreshing.
Cheers to you Dennis!!
See the New Pulse at http://new-pulse.ebay.com
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