eBay's Core Auction Business Is Looking Like A Drag

from the show-me-the-money dept

eBay has reported its latest quarterly earnings, and like Intel's latest results, they offer something of a mixed bag. eBay's revenues and profits are up strongly, but its auction business is stagnating. While it showed revenue growth in the quarter, that's attributed to currency effects and increased commissions for sellers, rather than growth in the number of listings or the value of goods sold. eBay's been able to generate growth by expanding its scope of operations, which is certainly helpful, but the weakness in its core auctions business remains a concern. Questions still remain about some of those expanded operations: for instance, though Skype's earnings grew, usage is flat. But perhaps the bigger problem for eBay is that it's struggling to get the new units to feed off of each other. Buying PayPal was a masterstroke for the company, since a simple and comprehensive payments system delivers benefits to (and derives benefits from) the auctions business. But other new businesses don't integrate so well. Part of the justification for buying Skype was to ease communications between eBay auctions' buyers and sellers, but that hasn't panned out, or turned into a money-spinner. Similarly, some observers say the US launch of its Kijiji classifieds site will drive usage of Skype and PayPal, but judging by the Skype acquisition, that's far from being a sure thing. Clearly eBay's got the ability to get some M&A work done, but its ability to meaningfully integrate its purchases to spur growth among its other businesses still isn't so clear.

Filed Under: ecommerce, m&a
Companies: ebay, kijiji, skype

World's Least Successful eBay Merchant Sells A PS2 and £44,000 For £95

from the A++++-seller-fast-shipping-and-free-pile-of-cash dept

We've had stories about the world's angriest eBay seller, but perhaps now we've found the world's worst eBay seller. A kid in England won an auction for a Playstation 2 for 95 pounds, but when it was sent to him, it also included 44,000 pounds in cash. The kid's parents have turned the money over to police, who are investigating the matter. The PS2 was also supposed to come with two games, though they weren't included -- but somehow we imagine that, even in the UK, 44 grand should be enough to pick up a few replacement copies.

Filed Under: auctions
Companies: ebay

Surprise: Auction Bidders Not Always Rational

from the zoon-economicon dept

In an attempt to gain a better understanding of human economic behavior, a group of economists studied the buying patterns of eBay auctions. What they found was that humans are not always rational, at least in the econ 101 sense of the word. One of their most surprising realizations was that bidders would often pay a higher price than the "Buy it Now" price, presumably because they got so caught up in the heat of the auction. This is an odd quirk, though its discovery was hardly needed to demonstrate that humans don't always operate in a purely rational manner. Another thing they discovered was that bidders didn't pay much attention to shipping prices, and that they'll typically opt for an item that can be won for less, even when shipping costs eat up any savings. Ultimately, there's more to auctions than simple price discovery. Not only are they successful because they help arrive at an equilibrium price for goods, but participation in them makes for a fun, game-like experience. Thus, it shouldn't be a surprise that those involved aren't always shining examples of homo economicus.

Filed Under: auctions, ecommerce, economics
Companies: ebay

Guns! Guns! Guns! Guns!

from the just-what-i-was-looking-for dept

Ever since eBay discontinued the sales of firearms, you can no longer buy such wonderful items like these.. However, apparently, by doing this, they've created a niche market in auctioning firearms over the Net.. So, now, you can go to SellGuns.com and satisfy all of your shootin' needs.

Talk about category killers.

Companies: ebay