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eBay auction business downgraded

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In my opinion as an user eBay was losing its competitiveness due to its own rules. Too many rules, too restricting rules, a very complicated system for sellers, not a very good search system for buyers, and not a very good integration of all its parts. Now the new CEO, John Donahoe, who was named Wednesday as a replacement for retiring chief Meg Whitman, will try to re-establish the trust of eBay’s users and shareholders.

Citigroup analyst Mark Mahaney, as well as Steve Weinstein of Pacific Crest, downgraded eBay rating in their reports.

John Donahue consider Google and Amazon the main rivals for eBay but, in accordance with Bits, John Donahoe said that “There is a lot of talk about Google’s relevance-based search”. The company is working on a system that will evaluate customer feedback, data from its PayPal payment system, shipping costs and so on to present the very best deals to shoppers.

“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.”

As for Amazon, John Donahue said sellers will appreciate the change in eBay’s fee structure that will reduce the initial cost of listing an item. He consider that Amazon is preferred by the sellers because it has less risk for them.

eBay expects revenues of $2 billion to $2.05 billion for the first quarter. After the financials were released on Jan. 23, eBay’s stock dropped 6% in post-market trading, giving up almost all of the day’s gains.

From Wikipedia:

eBay Inc.:

eBay LogoType: Public (NASDAQ: EBAY)
Founded: San Jose, California, USA (September 3, 1995)
Headquarters: San Jose, California, USA
Key people
Meg Whitman, CEO & President
Pierre Omidyar, Founder and Chairman
John Donahoe, Chief of eBay Marketplace
Industry: Auctions
Products: Online auction hosting, Electronic commerce, Shopping mall, PayPal, Skype, Gumtree
Revenue: $7.67 billion USD (2007)
Employees: 11,600 (Q1 2006)
Slogan: What ever it is, you can get it on eBay., and Shop victoriously!
Website: www.ebay.com

Meg Whitman:

Meg WhitmanMargaret C. “Meg” Whitman (born August 4, 1956) was the President and CEO of the online marketplace eBay from March 1998 to March 2008.

Whitman joined eBay when the company had 29 employees and operated solely in the United States; eBay is now a global organization with over 11,000 employees.

In addition to managing eBay, she currently serves on the Board of Directors of Procter & Gamble and DreamWorks Animation.

According to Forbes magazine, Whitman was worth an estimated $1.4 billion in 2007. She is one of only seven women to have been repeatedly ranked among the world’s most influential people by Time magazine.

On January 22, 2008, news broke that Whitman has decided to retire from her post as CEO of eBay.

John Donahoe:

John DonahoeJohn Joseph Donahoe II (born 1960) has been the President of the eBay Marketplace Business Unit since March 2005. In this role he is responsible for the flagship business, eBay Marketplace, including all North America and International operations.

Prior to joining eBay, Donahoe headed Bain & Company as Worldwide Managing Director where he held the post from 2000 to 2005.

Donahoe received his MBA from Stanford Graduate School of Business in 1986 and his undergraduate degree in economics from Dartmouth College in 1982.

He currently serves on the Board of Trustees for both universities.

On January 23, 2008 John Donahoe was appointed to take over as CEO of eBay when current CEO Meg Whitman retires on March 31, 2008.

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