Loss of auction interest hurts eBay
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Bill Radke: One stock that has been hammered lately is eBay. It seems more consumers are preferring price tags on their online items rather than taking their chance on an auction. Well today, eBay has invited financial analysts to its headquarters in San Jose to try to win back the hearts of investors. Marketplace’s Amanda Aronczyk has more.
Amanda Aronczyk: Remember the thrill of winning that rare Beanie Baby at your first online auction? If you’re like most consumers, that thrill wore off pretty fast.
Christa Quarles: The problem is that people don’t want to wait a week to find out whether or not they got the item, they want to kinda get in and get out.
Christa Quarles tracks Internet companies for Thomas Weisel Partners. She says eBay has struggled this past year while its main competitor, Amazon, has grown.
Both now sell fixed-price items. But, she says, Amazon is where people look first. And eBay’s auction marketplace — what it’s best known for — it isn’t the moneymaker it used to be. So today, analysts expect to hear a lot about eBay’s other online business: PayPal.
Quarles: We’ve kind of joked that they’re essentially going to change the ticker to PYPL, i.e. focus on the PayPal business away from the marketplace business, because there’s just, there’s not really a positive story there.
Quarles says that PayPal generates a third of eBay’s revenues. And, she says, it has the potential to become an online payment franchise to rival Visa, MasterCard or American Express.
I’m Amanda Aronczyk for Marketplace.
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