WASHINGTON - EBay Inc., the Internet juggernaut, seems to have lost its mojo, that special swagger that made it a rocket on Wall Street for six hot years.

The company Wednesday announced solid financial results for the first quarter, with revenue totaling $1.03 billion, up 36 percent over the same period last year. Profit was $256.3 million, up 28 percent.

Not bad for the average company, but eBay has never been your typical critter. In years past, its quarterly revenue grew by 50 to 90 percent and averaged 70 percent growth a year since the company went public in 1998. Wednesday marked the second quarter in a row in which eBay announced revenue growth considerably below 50 percent.
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Hey there Admin...Wanted to read the full article, but it suggests I must subscribe. Is there a way to pull it down? Just curious!! Thanks!

I just pasted the who article

EBay posts a second slow-growth quarter

By Leslie Walker

WASHINGTON POST

WASHINGTON - EBay Inc., the Internet juggernaut, seems to have lost its mojo, that special swagger that made it a rocket on Wall Street for six hot years.

The company Wednesday announced solid financial results for the first quarter, with revenue totaling $1.03 billion, up 36 percent over the same period last year. Profit was $256.3 million, up 28 percent.

Not bad for the average company, but eBay has never been your typical critter. In years past, its quarterly revenue grew by 50 to 90 percent and averaged 70 percent growth a year since the company went public in 1998. Wednesday marked the second quarter in a row in which eBay announced revenue growth considerably below 50 percent.

So far, 2005 has not been kind to the Web auctioneer. Its shares tumbled after the company made two announcements in January -- that profit growth had slowed in the last quarter of 2004 and that it was boosting selling fees in the United States. After peaking at $59.21 in December, eBay shares dropped to $31.58 before closing Wednesday at $33.11.

The fee hike sparked a mini-revolt among eBay dealers in February, with thousands signing petitions of protest and many threatening to leave for rival sites. Some analysts worried that eBay's core business, charging commissions to connect buyers and sellers, could face strong competition if sellers bypassed eBay to market their own Web sites directly to buyers.

Also worrisome were disclosures that eBay chief executive Margaret Whitman had interviewed for the chief executive's job at Walt Disney Co. before withdrawing her name from consideration.

Recently, Whitman sought to reassure anyone who thought she might be preparing to abandon a leaky ship. "I am personally committed to being a part of eBay's journey for many more years to come," she said in a conference call with analysts.

Whitman acknowledged eBay's revenue growth had slowed considerably in the United States, where it was only 19 percent in the first quarter, but she said international revenue was still growing at rates above 51 percent. Moreover, there were more users outside the United States than inside for the first time, she said.

Whitman said eBay was doing a lot to add new features and promote growth in the United States, such as a new "best price offer" that lets buyers haggle with sellers offering items at fixed prices. She also said PayPal, the electronic payment system owned by eBay, is expanding beyond auctions to process payments for big businesses, such as Apple Computer Inc.'s iTunes store.

"These are remarkable results by anyone's standard," Whitman declared. "EBay and PayPal are the best e-commerce franchises in the world."

Yet it is unlikely eBay's latest results will stop the debate analysts have been having over whether the auction site has simply taken a breather from its heady growth -- or is wrestling with more serious problems that could loosen its tight grip on Internet auctions.

Derek Brown, analyst with Pacific Growth Equities LLC, has seen signs of slowing growth over the past year that he described as too deep and wide to be minor. While eBay's revenue and profit are still growing, Brown's research showed some metrics declining, such as the amount of revenue generated per listing. The average number of items listed per eBay user also started dropping last year, Brown found.

"Any one of these metrics is easily explainable or overlooked," he said earlier this week, "but collectively they tell a fairly strong story, one that has been supported by the conversations we have been having with sellers."

More and more top eBay sellers are dipping their toes into competitive waters, Brown said, not only testing rival sites but also using Google's and Yahoo's search-related marketing services to advertise their own Web storefronts.

Mark Mahaney, an analyst with American Technology Research Inc., said it remains to be seen if Google and Yahoo present direct competition to eBay. "Right now I am skeptical of that approach, but it is an open thesis," he said.

Nobody is sure what, exactly, is causing eBay's growth to slow or its dealers to get restless. There are hints of buyers drifting away, too: After years of steady growth, eBay's traffic has dropped for nine months in a row compared with the same months a year earlier, according to ComScore Media Metrix. In January and February, eBay's traffic drops were particularly steep -- 14 percent each month.

EBay still commands huge traffic -- 66 million visitors in March, more than a third of the 164 million Internet users in the United States, according to ComScore. And its transaction volume dwarfs that of all competitors, with a total of $10.6 billion in goods sold in the first quarter of this year.

But eBay dealers have been complaining that their auctions are drawing fewer bidders and lower selling prices, something eBay executives chalk up to natural demand cycles in any marketplace.

Bob Lee, a video-game dealer in Columbus, Ohio, who runs a Web site called Power Sellers Unite, said he stopped selling on eBay after the recent fee increases.

"We are now helping sellers find alternative auction sites and ways to promote their listings," Lee said. "We have members who will never list on eBay and many that have cut down on their listings."

Other dealers, however, find eBay's sheer number of buyers irresistible. Rmenda Rice, a seller in Disney, Okla., said she tried auctioning her goods on Overstock.com a few times after eBay raised her fees: Overstock's "fees were lower, but the site just wasn't getting the business eBay did."

Nobody, of course, is suggesting eBay is facing any real financial trouble. It remains one of the world's most profitable companies and might even get its mojo back if its auctions catch fire in China, say, or another large market and spread there at the same amazing rates once seen in the United States.

Thanks so much for the full article. It's interesting to see the US trend(s). Of course, the Bay is doing what is logical - reaching oversee(s) and exploiting the other business lines (Paypal). It may be a realistic "thought" that the auction industry is maturing, and others will begin to slowly gain market share.

Think back to the world of telecom...First ...ATT, then divestiture, then MCI, then Sprint, then wireless, then .....price wars, now - long distance, local service and even wireless are all commodities.

Makes one wonder what the market maturity point is, when it will arrive and how will differentiation happen?!!??

Thanks for sharing!

That's why so many listing fee sales recently, trying to drum up traffic and revenues.

Jen:

I agree completely; and I suspect with sellers exploring other sites with lower or no listing fees we're going to start seeing more price wars or sales on listing.

It's going to be an interesting 5+ years as this all comes forward to the market!

Well, PayPal is even more arrogant than eBay... and it's shocking how they can get away with complicity in fraud...

To read about a scam being perpetrated on eBay sellers through PayPal
http://www.paypal2005.blogspot.com

They, too, need competition to bring them into line... Square Trade is a rip-off too.

Sign up for an alternative to PayPal and get $25!
www.greenzap.com/s42