And their new found relationships. Below is an article outlining their new business dealings with Yahoo and Google.
Are eBay's partnerships with Google, Yahoo good for sellers?
From MarketWatch, online at:
EBAY'S TANGO WITH GOOGLE, YAHOO
8/29/2006 12:01:00 AM
By Bambi Francisco
12:01 AM ET Aug 29, 2006
SAN FRANCISCO (MarketWatch) -- EBay's dance with Google and Yahoo begs the question
of whether the world's biggest online marketplace is stepping on the toes of its core
sellers.
Since last year, eBay has struggled to maintain its seller community -- its bread
and butter core clientele -- while repeatedly changing the rules of the game.
Anybody can sign up to sell their stuff on eBay. But it's the repeat sellers, with
their virtual storefronts, who generate the steady fees for the online auction
company.
In January 2005, eBay raised final-value fees for store inventory. The move caused
an uproar within the seller community. In July of that year, eBay tried to appease
sellers by promising them more visibility, free services to manage products, and
higher referral fees. Then in January 2006, eBay let listings of store owners get
more exposure on search results (a positive move that ignited store openings at
eBay). The benefit was taken away two months later, followed by a price hike in July.
If I was an eBay seller, I'd be manic, mad, dizzy, or all of the above.
Have any of these changes (plus the Skype acquisition that eBay paid a mint for)
helped or attracted more store sellers to the eBay community? It looks like the
answer is yes. At the end of the second quarter, eBay had 255,000 store sellers in
the U.S. alone. That's equivalent to the number of store sellers eBay had around the
world at the start of 2005.
But if eBay's stock is any indicator of the company's ability to make its sellers
happy, the answer is no.
Besides short-term ebbs and flows in the stock, the bottom line is that eBay's
shares are down 57% from $58 at the start of January 2005.
Shares hit a low of $24.03 on August 4 as investors continue to bet against eBay's
ability to keep and grow the number of sellers on its marketplace.
Then on Monday, eBay announced a partnership with Google , to put Google's
advertising network on eBay's pages outside the U.S. The deal is similar to a
relationship that San Jose, Calif.-based eBay struck with Yahoo back in May, whereby
Yahoo's sponsored listings would appear on eBay's pages in the U.S.
Shares of eBay rose 2% Monday, partly because eBay would be monetizing the search
traffic internationally. Additionally, Google will help distribute Skype, the voice
over Internet technology eBay paid $2.6 billion (upwards of $4 billion) last year.
Skype will also distribute Google's toolbar, a deal that will likely give Skype
future payment for searches conducted on that search toolbar. All this is positive
for eBay's shares.
But clearly, the fact that eBay had to partner with Google to distribute Skype says
something very negative about eBay's own community and ability to distribute Skype.
But I won't get into that here.
Conflicted landscape
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EBay's advertising deals with Yahoo (domestically) and Google (internationally) are
changing the landscape for its core sellers yet again. While it's not changing any
"If sellers see more ads [from third parties, like Yahoo or Google], it'll
accelerate their multi-channel adoption," said Scot Wingo, of Channel Advisor, a firm
that helps companies liquidate their goods on eBay, Yahoo, Google, Amazon dot com and
other online outlets.
Ultimately, eBay hopes that adding sponsored listings from both Google and Yahoo
will be good for the buyer, since it gives buyers options. I agree. But according to
Grossberg and some Wall Street analysts, there's a lot more that eBay could do to
keep buyers busy shopping on eBay's marketplace. It's not more listings that buyers
need, but a better experience from the checkout to the delivery of the goods,
according to Grossberg.
And, unfortunately eBay's partners do nothing to fix that situation.
If anything, they may only serve to distract eBay from doing anything about it.
Sound-off: Is eBay making the right decision to partner with Google, Yahoo for
advertising? Post on my MarketWatch blog at receive this
column via e-mail. Sign up for Bambi Francisco's newsletters. Sign up here.
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