What Happened to eBay?

By January 23, 2009 10 comments

I’ve been thinking a lot about eBay for the last couple of days. Not that I have anything to buy or sell, but I’ve been perversely intrigued about the auction site’s dramatic fall in 2008. Sure, last year was rough for everyone, but for this former giant, it was especially bad. This week it was announced that eBay’s Q4 profits had fallen 31 percent, the San Jose, Calif., company’s first decline since 1995, when many – if not most – people weren’t even on the Web. The major reason given for this is eBay’s shift of focus to fixed-price sales. Auction sales are declining and fixed-price sales are losing to Amazon and niche retailers. The Internet accelerates the changes in consumer behavior, and part of eBay’s difficulty lies in this. Online auctions, once a novelty, are now a hassle; not only that, they’re not even sure to offer the best prices anymore.

EBay still gets the most retail traffic on the Web, but its growth has flatlined. Some believe that eBay’s failings are part of a well-established cycle.

Sarah Lacey, author of “Once You’re Lucky, Twice You’re Good: The Rebirth of Silicon Valley and the Rise of Web 2.0,” discusses this “Valley truism” in a recent article.

“No publicly traded Internet company stays on top for more than four years,” says Lacey.

“We saw it with Netscape, Yahoo, eBay, and I think we started seeing the beginnings of it with Google at the end of 2008.”

Lacey cites VC and Pay-Pal co-founder Peter Thiel, saying there are two reasons for this “Darwinian Web Cycle.” Companies begin to lose their best employees the further they get from their “big IPO (initial public offering) moment,” and hubris sets in: companies start to believe that their initial success will lead them to do well in any new venture and business model.

And as any reader of Greek tragedy or Hollywood gossip knows, hubris often leads to fatal downfalls.
eBay Inc. Reports Fourth Quarter and Full Year 2008 Results

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I think what is consistently disregarded in posts like this is what is under the surface. Ebay was doing well up until it started trying to cover it's slippage on the backs of the people that use it. The simple fact is the policies kept changing again and again.

Costs kept rising with more and more draconian rules and insanely poor customer service. What started as being user friendly became a monster that bit the hand that fed it.

Ebay isn't so much a part of the cycle as getting exactly what its policy makers deserve. Failure. Too bad for all the people that work for these places and too bad that ebay policy makers didn't pay attention to the thousands of complaints and the hundreds of thousands of lost members.....

Submitted by La Haine (not verified) - on January 11, 2010 at 11:35 pm

Auction sites like eBay are losing their excitement as they move from the thrilling auction experience to the boring "buy it now" market. eBay probably feels it's biggest competitor is Amazon.com which doesn't even do auctions. As you see, eBay has been trying to evolve into something that wasn't at it's core. However, businesses have to adapt to stay alive. Businesses shouldn't be so narrow focused in their business plan such as stating "we are an online auction site"...and more likely to be "we are an online ecommerce site". The latter would allow eBay to justify their movement away from the auction style site.

The excitement that eBay once brought to customers when they were bidding has now moved into the "penny auction" space with sites like Swoopo (swoopo.com) or BidBlink (bidblink.com). This is where people are getting really cheap deals and also getting the rush that people once experienced on sites like eBay.

These penny auctions started off in Europe and in late 2008-early 2009, they started hitting the United States by storm. This concept is still pretty new to most people and most think it's a form of gambling. However, sites like BidBlink and Swoopo offer their bidders the ability to buy the products at a discount if they don't win. People still don't seem to grasp that.

Keep your eye out on this new penny auction industry.

Submitted by Ryan (not verified) - on November 23, 2009 at 05:16 pm

Lets face it... The good days of eBay are gone forever! eBay's idea was to get rid of the small guys (the good old "Mom & Pop" sellers) who are the ones who put them in business years ago, when ebay was a fun place to go to bid and selling was usually a profitable experience...

Greedy eBay did this to make way for the bigger corporations! The site is way too commercialized and has lost it's appeal, for those looking for a friendly, personalized experience. Try getting a reply to a message sent to a seller these days. Worse yet... from what I hear - you have to practically beg for good feedback from a customer!

Millions of sellers have left eBay because it became impossible to make any money. It became nothing but a LOSING situation. Today... many auctions & advertisements end without any bids or sales - it's not even worth placing a listing! All you do is pay, pay, pay GREEDY EBAY!

The GREED is what will put eBay under & I know alot of people who can't wait for their DEMISE! No one deserves it more. eBay sucks... it's like the Walmart of the internet universe!

Submitted by Mark (not verified) - on April 25, 2010 at 02:34 pm

i gave up on ebay some years ago when i posted items with fees of $70 one nite the next morning i was suspended by a complaint my 3rd in 4 years. they deleted all my listings pictures and descriptions that were never listed and wanted the listing fees anyway. the complaint i had, had been corrected to more than the satisfaction of the customer with even a thank you card sent to me by the customer. as were the other 2 complaints. ebay says get them to reply to us in the usual way which is so much trouble no one did or your account info in not available because it is closed and you can't contact them or they aren't even on ebay any longer.and pay us the $70. i just went on the sight and it looks like a picked over dying flea market. i have enough stuff in storage to restock ebay. i sold and bought in the world market. so do we just sit on our merchandise and wait it out? is there a new market?

Submitted by Linda Mills (not verified) - on March 11, 2010 at 03:23 pm

Some great comments here. I'm wondering if we'll be saying similar things about Facebook's changes in the near future.

Submitted by admin - on April 26, 2010 at 12:22 pm

From its inception until 2008, I was an avid eBay buyer. Through out this interim as a regular eBay customer, I saw within the last several years asinine and greedy business policies and practice put into place that started eBay’s slow spiral downward as once one of the really big giants on the Internet. Of course, eBay was over and over again loudly warned and advised by both buyers and sellers (via their in-house community groups and blogs) that they were definitely going down the wrong business path heading towards eventual failure if they continued with their self-destructive ways changing the original, highly successful business model of eBay.

Obviously eBay’s head honchos had their heads way too far up in a place where the sun don’t shine, and failed to really listen to these important rumblings and voices of reasons from their very own once sustaining business patrons. As eBay’s business began to decline (re: by eventual deliberate mass exodus of sellers and buyers), these same delusional folks in control were in complete denial, and instead of blaming themselves for “fixing something that was not broken”, began blaming the recession and bad economy for their ill-fate.

To put into more simpler terms, if you want to place fault onto someone for taking away eBay’s web ambiance of once being the coolest and a fun place to hang out on the Internet, the blame directly belongs to Margaret Cushing "Meg" Whitman, the former eBay President and CEO (1998-2008), who is now the running Republican candidate for Governor of California. (Just what poor California needs now?!! An apparent lame and bungling business person to further sink the State into more financial chaos and ruin like she did pitiable eBay.). (NOTE: I am a registered "REPUBLICAN" and I'm not voting for her, so there's no political bias on my part in duly criticizing her).

Submitted by Gene Eggers (not verified) - on May 17, 2010 at 12:33 am

Ebay has done this to itself. It has over regulated everytying and unless you are selling beanie babys they bump auctions on a daily basis. No gun parts, no ww2 era german items, I had a auction bumped because it had the word ak in it as in ak sling, yep it was a web sling not a gun and it got bumped, then the prices, The price of an auction just to list it is expensive then they take a percentage of the sale price, they want it up front and in the rear. Then they took away the ability of the seller to give neg. feed back and you are the mercy of buyer. If they are reputable it works but it not you may have to pay a ransom to keep a neg from being hit on your account. Add it all up and Ebay sucks the big one.

Submitted by Jim Young (not verified) - on May 17, 2010 at 01:52 pm

The fact is that eBay is ruined by policies.

One thing I have noticed repeatedly is the hostile attitude that sellers feel eBay has towards sellers. I am a PowerSeller on eBay and soon will not sell at all. I am that tired of the BS. Monthly they are ramming more and more rules down the throats. Today I got my first negative in ten years because a bidder did not like the amount of time that the USPS or post office took to deliver something. Since feedback is entirely false at this point - one sided feedback does not a story tell and it only undermines the ability of sellers to protect themselves and each other - what is the point of feedback? To demean the sellers?

I am setting up my own website and will use Google and Craigslist to drive traffic to it.

If I want to have fixed priced listings I can do it outside of eBay with less stress.

John Donohoe has killed eBay and their board of directors is so ignorant to keep on waiting to see what he will do next.

Last person out of the building turn off the lights...the crickets are getting louder and louder in this big empty space formerly known as eBay.

Submitted by AJLind (not verified) - on September 13, 2010 at 10:00 pm

Great Post
And great replies.

Yes I too think that the online auction sales model has lost a lots of its appeal.

But I also think that ebay cannot into on online retailer, as it does not have any stock.

They would be best to go back to auctions and just do that. There will always be a demand for online auctions. It just will not be as big as it once was.

With their policies, they are also driving many of their sellers to other auction sites, and to set up their own websites. This will cost ebay dearly over the next year or so.

Submitted by Digby (not verified) - on June 16, 2010 at 01:59 pm

[...] looked for this shirt for many years on Ebay and even before the site’s recent irrelevance, I could never find it. Then, there it was in front of me on the back of a boy who looked like [...]

Submitted by thechicory.com » These Hard Sundays (not verified) - on September 14, 2010 at 01:10 pm

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