eBay continues pivot from auction site to tech company: SV 150 growth profile

If eBay wants you to know just one thing, it’s this: the company is not your auction site from the 1990s.

Sure, shoppers can still bid on Nike running shoes or a used bicycle, but eBay is not focused on being a retailer (new) just an auction site. (end new) San Jose-based eBay says it’s a tech company that aims to help, not hurt, retailers by improving their e-commerce operations.

eBay Marketplaces chief Devin Wenig said “our goal is to become the partner of choice for merchants.”

eBay has turned its attention to more innovative apps that allow consumers to shop from their neighborhood merchants, buy online and pickup in stores, and get home delivery. The company is also growing its Retail Associate Platform, a tablet app for retail workers to improve customer service. Also in the works is The Plaza, eBay’s new online marketplace that will allow brands to sell directly to consumers.

Investors expect these mobile apps and shopping platforms will strengthen eBay’s marketplaces division – the businesses that include eBay’s e-commerce apps and sites.

“Marketplaces is a growing and very profitable business that has shown some great innovation over the last few years,” said Gil Luria, an eBay analyst with Wedbush Securities. “Its apps are extremely popular and they have had great success in getting the fashion and auto parts categories to grow very fast.”

San Jose-based eBay’s outlook is aggressive, but most analysts agree doable. eBay wants to grow annual revenue to more than $21 billion by 2015, up from $14.1 billion in 2012, and hit $110 billion in annual sales through its online marketplace, which easily beat JPMorgan Chase’s estimate of $101 billion.

The company’s marketplaces revenue reached $6.8 billion at the end of 2013, and has grown about 12 percent year over year since 2010.

Luria and other analysts say eBay will have to rethink its same-day delivery service, eBay Now, which still operates at a small scale and is likely losing money – eBay pays personal couriers who end up sitting around part of the day, and charges just $5 for the one-hour deliveries, less than the courier’s hourly wages. But same-day delivery is a must for eBay to keep pace with Google and Amazon.

PayPal will also continue to pour money into eBay’s coffers; the Web-based payments platform in 2013 generated about $6 billion, slightly less than the marketplaces business. Its annual growth has been well above 20 percent for most of the last decade. eBay’s total revenue for 2013 was just more than $16 billion, a 14 percent increase over the year before.

The PayPal-eBay relationship has been the focus of a contentious face-off between eBay executives and activist investor Carl Icahn, who called for the company to spin off PayPal. eBay has no plans to sell the company, and PayPal is expected to continue to bolster eBay’s earnings in 2014.

Editor’s note: The annual Mercury News Silicon Valley 150 report is coming up. For more stories about the outlook for some of Silicon Valley’s biggest companies and hottest sectors, check this blog and the SV 150 special section, which will soon include this year’s coverage.


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  • Rich Vernadeau

    And in the process of this transformation, eBay has deliberately kicked thousands of small “mom and pop” sellers to the curb, eliminating thousands of long-term sellers who actually helped build the site from 1995-2008, before John Donahoe’s destructive reign as CEO of eBay.

  • 1voice111

    eBays original contribution was that it WAS a great Auction site for individuals (not “retailers”) to buy and sell to each-other, now it is just a poorly run on line dollar-store / shopping mall. …. yawn ………..

  • The ugly reality of eBay Inc.:
    eBay’s crooked auctions marketplace … bit(DOT)ly/11F2eas
    eBay Motors (UK sampling): Auction Fraud Galore … bit(DOT)ly/I2gTEU
    eBay Motors XSS Redirect Scams in Action: video … bit(DOT)ly/1d46NvE
    eBay/Gumtree / Barclays Bank Motors Scams … bit(DOT)ly/1c9Uwck
    eBay’s clunky, unscrupulous “PreyPal” … bit(DOT)ly/UVXx53
    The ongoing joke of it all … bit(DOT)ly/YvxFEg
    Fun quotes from the eBay executive suite … bit(DOT)ly/12xvzyA

  • Michael Jafferian

    The company is your auction site from the 1990. Mad cronyism. The community is ruthless and is run by thugs. Nice people working for them. I bet they wish they had a different job. Shop and buy safe at Amazon.

  • Item Auctions

    Post your listings for free on ItemAuctions.com – The Free Marketplace, with no fees!

  • smarts55

    eBay is going to be destroyed as a company by John D Hoe.

    JD’s micro-management of eBay is a perfect example of how to run a good company into the ground.

  • “We think Bitcoin will play a very important role in the future. Exactly how that plays out, and how we can best take advantage of it and enable it with PayPal, that’s something we’re actively considering. It’s on our radar screen.”—Johnny Ho, eBay AGM 2014 …

    In other words, he hasn’t got a clue; then …

    “We are blessed with a business model that if we deliver for all our buyers and sellers, our marketplace produces profitability and cash flow, …
    “I think an important move we made several years ago is now, eBay doesn’t succeed unless you succeed. If you don’t sell, we don’t get anything. And I think that’s an important move where our fees, our take rate, our revenue, our profits only occur when sellers like you all over the world successfully sell something.”— Johnny Ho, eBay AGM 2014 …

    If sellers don’t sell, eBay doesn’t get anything! Wow, what insight Johnny Ho has finally developed; must have been on one of those “thinking days”, with Alice in Wonderland; too bad it has taken so long for the penny to drop …

    And, why do you think that eBay is thinking about repatriating all that buried treasure from overseas? Because they want to demonstrate their patriotism by paying some U.S. tax thereon? Dream on! More likely, simply because the eBay balloon is continuing to deflate and they now need the cash to fuel the hot air generators to try to stop the stock price from collapsing and, apparently, to try to buy a job lot of petty sellers/buyers at $15/head …

    And, of course, eBay and “PreyPal” should stay together, for without “PreyPal”, eBay’s revenues would be atrophying at an even faster rate; regardless, they should stay together and comfort each other as they both continue on their journey down the toilet …

    “What eBay Delivers to PayPal”—eBay 2014 AGM http://www.ecommercebytes.com/cab/abn/y14/m05/i14/s01

    The pie charts shown at the 2014 AGM clearly demonstrate the dependence of “PreyPal” on the eBay marketplace; they indicates that whereas >30% of PayPal’s revenue comes from eBay transactions, ~50% of PayPal’s profit comes from those same eBay transactions; the remainder, of PayPal’s off-eBay, on- and off-line operations, are therefore problematic—as one might expect from such a clunky operator when it has to stand on its own feet. Further, all the indications are that the “off-line” experiment by eBay of “PreyPal” at Home Depot et al, remains stillborn, and the subsidizing of such off-line installations/operations is a total waste of eBay shareholders’ funds—LOL …

    And, you know things are getting desperate when one of the “Reverends” is invited to address the congregation; then, maybe Jackson was simply performing the “last rites” …

    eBay Inc, where the incompetent mingle with the malevolent and the criminal … http://bit.ly/11F2eas