At eBay’s annual meeting, CEO John Donohoe said that auctions now make up less than half of all listings on the site. And he predicted it would drop to 30% by 2011. Just a few years ago, auctions made up around 70 percent of the listings on the site but in the last quarter they were only 45 percent.
This is not by accident. Since Donohoe took over, eBay has made a concerted effort to look more like Amazon, attract large merchants and focus their growth on fixed price selling.The very nature of the auction business is that it only works when there is a sense of community and a shared passion between buyers and sellers. Those are the traits that made eBay successful. And, these are the same traits that eBay has assiduously tried to kill over the last few years since Donohoe arrived. Actually it started somewhat before Donohoe took over, but has accelerated under his leadership (or should I say lack of leadership).
So John – since you don’t care for that segment of your business, why don’t you just spin it off like you did with Skype. I am sure there are buyers and it could even make sense as a public offering. You could sell the auction business with the caveat that whoever buys it cannot compete with eBay in fixed prices selling –it would have to remain an “auction only” business.
Who would buy eBay’s Auction Business?
Personally I think it would be a good acquisition for Yahoo. They are struggling and this could make them right over night. Yahoo tried the auction business once and they did a good job with it –but they were too late as eBay already had the market share and Yahoo just couldn’t penetrate. But today it could work.
So what do you think? Leave a comment. I would love to hear your thoughts.