ChannelAdvisor

eBay Live Speculation

Well we're T-minus 12 days and counting until eBay Live.  Every year eBay uses the opportunity to announce some new things.  Here are my top 5 predictions:

1. eBay Express - ok so this is a gimme - Meg said at the Goldman event this is the official launch of EE.
2. The community speculation on some kind of shipping announcement is up to a big roar right now.  Bill Cobb promised to fix this by this eBay Live at the last eBay Live.
3. Blogs and Wiki - there are two classes on the agenda about "ebay Blogs" and "eBay community Wiki".  Also AuctionBytes wrote a story without details recently. (good scoop Ira!!)
4. There'll probably be some discussion of the Yahoo! deal - more traffic for you eBay sellers ---> WOOO!

If you're attending eBay Live:

• I'd love to meet you! Stop by the booth or I'm speaking in one of the classes (Wednesday at 4:30 - code 210 in Mandalay Bay Ballroom F - "Top Strategies for Building a Great Business on eBay").
• I'll bring some freebies to the class and if you say you're an eBay Strategies blog reader I'll make sure you get something good.
• Details on all of this:  http://www.channeladvisor.com/ebaylive
• Lots of our top seller customers will be presenting - see the list here.

See you in Vegas!  What do you think eBay will announce - feel free to submit in comments and in my wrap-up we'll see who got closest and who had the worst guess ;-)

Three Google-bits I haven't seen in the press.

1. Google Base is live in the UK - check out this neat London product search
2. Google Base is live in DE - check out this neat Berlin product search (memory stick for your xbox or a crib - interesting selection!)
3. Interesting speculative zdnet blog article on Google Checkout. 

I have a box of free ChannelAdvisor goodies to the first blog reader that emails me and can correctly guess why the checkout price in this article is $3.14.

Why I think an eBay Store listing increase is coming (soon – ebay live?)

At Goldman Sachs based on what Meg said, I got the inkling that she was foreshadowing a listing fee increase for what eBay coins SIF (Store Inventory Format) with analysts (ironically sellers wouldn’t know the SIF acronym).

So here’s my case:

• In the .com, the store listings are growing crazily
• In Jan, eBay implemented Stores in Search (SIS) globally putting store listings in with core.
• In the .com, this apparently caused buyer confusion (because of the abundance of store listings)
• Therefore in March, eBay reversed SIS – for the .com ONLY.
• At the Goldman Sachs conference last week, Meg gave several series of talks: Wednesday she had small meetings with 10-15 investors at a time that were webcast (voice only). Thursday she gave more of these as well as the main “all hands” Noto fireside chat.
  • The buzz Wednesday was that in an earlier small meeting she had said they would lower core pricing to bridge the value gap between core/store.
  • In fact, Justin Post at Merrill Lynch was listening and issued a report in the wee hours of Wed evening. In his report, Justin theorizes we could see a lower core or higher store to adjust the fees.
• During her main speech which I recorded in parts V and IV on the blog, she said:
  • “As we manage via pricing and other techniques” we will bring more balance to the marketplace.
  • In the .com/US, the pricing difference is largest between SIF/core of 8 markets.
  • Finally during Q+A, Justin Bauldorf asked specifically: In an earlier session you were quoted as saying you would lower store/core listings? Meg replied: I didn’t say that, we’re looking at things.

Let’s dig into this. We did some research today (thanks ChristineM!) and checked every eBay country with stores and compared the listing fee only for an item that’s about $45 (ebay average ASP) for core and store and compared the delta (normalized to $USD):

• .COM - $1.20 vs. $.02  - $1.18 delta
• Ebay.co.UK - £.75 vs. £.03 - $1.35 delta
• DE – €1.60 vs. €.03 - $2.02 delta
• FR - €.90 vs. €.01 - $1.14 delta
• IT - €.80 vs. €.05 - $.96 delta
• AU – AU$1.40 vs. AU$.10 - $.99 delta

• Switzerland – CHF 0.30 vs. CHF .02 - $.23 delta

• ebay.ca – C$1.65 vs. C$.02 - $1.48 delta

So looking at this the biggest listing fee core/store delta eBay country is DE, then CA followed by ebay.co.UK and finally ebay.com. Based on this I don’t get what Meg was saying. Using her logic, the pricing difference on listing fees in these other countries should make store listings go crazy, but it’s only the case for ebay.com.

 Adding FVFs for a 100% conversion $45 item in the mix you have: 

• .COM – Core: $3.11 vs. Store: $3.02
• Ebay.co.UK – Core: £1.96 vs.      Store: £1.58
• DE – Core: €3.35 vs. Store: €3.33
• CA – Core: C$3.94 vs. Store: C$3.57

Based on the total fees, ebay.ca and the ebay.co.uk have the highest difference and ebay.com is one of the closest.

In any case, my prediction is we’ll see a listing fee increase in stores – maybe as high as .10 or it could be like some countries, where it’s .04 for 30 days and a .06 surcharge for additional timeframes.

What do you guys think? Seems like the FVF in stores was so recent, it will be interesting to see how they try to message any increases.

Of course I could be wrong and we could see a core decrease of some sort. Based on previous actions that would be very unusual (especially not in the lowest tier).

May and June PayPal Coupon Codes

Try these codes: CPPEBAY03 and SPRINGSHP06  readers are having success with these.

(phew) The week in review

Last week was the most news-worthy week of 2006 as far as eBay, Google and Yahoo! (and let’s not forget MSN).  Here’s a quick recap with some editorial thoughts:

• JPMorgan analyst Imran Khan predicted internet consolidation and put forth some very interesting financials
• While at the Goldman Sachs conference, eBay and Yahoo! Announced their paypal/ad-selling partnership
• Noto had some really interesting points, the biggest of which is the firm with search, ecommerce, voip, payments and email will be very strong because it will have the most interactions with a consumer as they do their favorite tasks on the web (sounds like eBay+Yahoo! or MSN).
• Meg covered the details at her fireside chat with Noto, and answered some Q+A
  • There were many questions about stores in search (SIS) and store inventory format (SIF)

  • I got the feeling a store price increase is coming

• At GS, Yusef Medhi said there could be some “transformative” acquisitions soon.
  • The NYPost revealed that MSN and eBay have been in talks but they recently cooled.
• Also during the conference, the Google/Dell deal was announced.
  • During Eric Schmidt’s fireside chat, when asked if eBay is a competitor he answered: “Heaven’s NO!!!” and he said that everyone benefits from a strong eBay.
  • He also suggested that Google will be working with PayPal soon on Google’s payment/checkout system:
    • “PayPal could one day become a payment method within Google's system, much as Yahoo agreed to do under the pact it announced with eBay Thursday, he said.”

What does all this mean?  Well we’re entering a very interesting phase of the “clash of the titans” as I like to call it.  Relationships are being formed, alliances started and the big fish will gobble up the little fish.

Would Yahoo! still work with eBay if owned by MSN?  Doubtful.  Would Google see eBay as a friend if part of Y! or MSN?  Doubtful. Could Google enter what looks almost (ironically) like a bidding war for eBay?

The three most interesting points from all this:

1. During Meg’s chat, and discussions on SIS/SIF she hinted to a price increase in stores (more on this later)
2. Several analysts I talked with didn’t have a rosy view of the eBay/Yhoo partnership (more on this later too)
3. Meg revealed that a company called gmarket is their big competitor in korea that’s been taking share.

It would be really interesting to see what this looks like behind the scenes. For example, did the eBay/Yahoo! partnership announcement help or hurt the MSN talks?  Does this pull Google into the mix?  Why did Microsoft leak this to the NYPost or did they do it on purpose?

Meg @ goldman - Q+A

Q: why did you pay so much for skype

A: With skype we bought the user base, it's a verb and the technology (voice compression was given as example).  Second, remarkable product roadmap.  If you look at their full suite of products, they are leaps and bounds ahead of competitors.  Brand, technology, roadmap - fourth ecosystem.

Q: Kijiji - what' up? (I love to type Kijiji)

A: We own 25% of craigslist, we've bought tons of things and put them into Kijiji - together we are in 20 countries and 400 cities where we are number 1 or 2.  In 12 months we've built 1/2 position in classifieds.

Models are different - some listing fees - maybe by category, maybe by ASP.

Craigslist monetization is housing/jobs in SFO/NY.  Kijiji is more monetized.

06 - scale

07 - monetization

We admire craigslist. That was the inspiration for going global.

Q: (Justin Bauldorf) In one of the small meetings they thought you were going to lower the eBay store fees - is that true?

A: Meg - I didn't say that, we're looking at things.

Meg @ goldman - part X

Noto: yhoo has 500k advertisers you have 500k stores, what's overlap?

Meg: Don't know, largest is the US, this is certainly something we want to look into.

Noto: Could you disintermediate the entire ecommerce search stream?

Meg: interesting, we think about it, could we have search not be the starting point? that's an overstatement.  That being said we have lots of assets to bring to bear - power of three.  Wallet/reputation and presence with skype.

If we decouple in ways that enable us to have building blocks that travel across the web, that's something we should think about.  Reputation for example.

Meg @ goldman - part IX

Noto: Skype, when are the benefits coming?  Paypal/ppcall/search?

Meg: Hard to read the crystal ball.  The player that gets the largest scale in this new system - helping the world communicate, and ecosystem will have highest rates of monetization.

Telephony arb will exist for long time.  It will be come a decreasing % of revenue. If I rank the revs:

1. Integrating paypal as Skype wallet - If skype can have paypal as its wallet - every new skype user has to have paypal, etc.
2. Accelerating trade on eBay in high asp cats.
3. Enabling ability to launch new marketplaces that are lead oriented. Lots of queries on eBay because we don't match well - real estate best example.
4. Local search/web-wide search into the skype desktop presence- 6m concurrent users, 120k phone calls.  Huge opp.

That's the order and how you monetize.

Meg @ goldman - part VIII

Noto: Korea - what's up?

Meg: background on korea

Historically we've crushed the competition

Now we face gmarket: integrated into CSE and targeted young female shoppers. Sort by popularity.

We said - those are good ideas, let's copy and use our scale to compete.

We also changed our pricing to be aggressive to win back the sellers that defected to gmarket.

Korea grows, we have taken positive actions. Optimistic we'll battle off another competitor in Korea - our team is top 2/3 in terms of eBay experience/capability.

Meg @ goldman - part VII

Noto: china, was it a mistake to switch over to global?

Meg: we did see a slowing in momentum when we did that?  Was it a mistake? with 20/20 hindsight, I think it was.  We've done this before, it slows, but long-term 6-9-12-18 months later you get the benefits of the eBay platforms flexibility and changes (??!)

Paypal is fully launched in China and Skype - over 25% of listings offer Skype with great success - conversion rate higher, higher ASPs.

It's a long game, very competitive, China is competitive and I feel good about where we are.

Noto: In London you said you can gain share.

Meg: I do think that, our local folks are great - great local Chinese team (9mos in the biz).