The Grinch pays a visit to eBay
The holiday season hasn’t brought its usual good tidings to auction-based marketplace eBay this year, reports the Wall Street Journal. Site traffic for November and December fell off 16 percent from last year; transaction revenue has slipped 28 percent to $1.44 billion; and some users have reported a decline in individual sales of up to 40 percent versus 2007. Some analysts are even predicting the San Jose, Calif. company to post its first decline in revenue since its inception at the end of the quarter.
So what happened? These trends point to a problem that transcends the poor economy. The likely guess is that customers are responding negatively to changes implemented by new chief executive John Donahoe earlier this year. These changes include a move away from the auction model that distinguished the site initially. There are now more fixed-price items being sold than ever before - fees to list them have been lowered, and the fees for items successfully sold raised.
