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EBay Celebrates 10 Years but Reaches Crossroads
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Added: 06/23/2005
Type: Summary
Viewed: 545 time(s)
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EBay Celebrates 10 Years but Reaches Crossroads
Los Angeles, CA June 23, 2005 -- As online auctioneer eBay gears up to celebrate its tenth birthday during its annual “eBay Live” user convention today, challenges on the horizon call into question what the e-commerce giant’s second decade will look like. Slowing growth and increased competition will be daunting tests that may require a face from the past, according to author and former insider Eric M. Jackson.
After years of heady growth, the former dot-com darling has seen its expansion stall and its stock price tumble. A February round of fee increases generated intense customer backlash that eventually forced the company to backtrack. But the concession may have come too late as traffic to eBay’s flagship U.S. Web site declined for the first time ever last quarter. With revenue growth slumping, share prices of eBay’s stock have fallen 36% this year. And last week reports surfaced that search engine powerhouse Google would go head-to-head with eBay’s most promising business line, the online payment service PayPal.
“‘EBay Live’ used to be a cause for celebration, but this year the bloom’s off the rose for eBay,” says Jackson, who previously ran PayPal’s marketing team. “They’re facing a host of serious long-term challenges to their core auction business. Yesterday’s Wall Street Journal reported that eBay sellers are abandoning the service in increasing numbers to sell on their own Web sites. With the ability to use paid search ads to generate customers, it’s not clear that eBay has a plan to bring those sellers back.”
Jackson’s award-winning book, “The PayPal Wars: Battles with eBay, the Media, the Mafia, and the Rest of Planet Earth” (World Ahead Publishing; hardcover: $27.95; ISBN 0-9746701-0-3), chronicles PayPal’s tumultuous origins, including its intense clashes with one-time competitor eBay. Before acquiring PayPal, the auction giant operated a competing payment service that lead to a number of high profile disputes between the two companies, including an incident in which free PayPal T-Shirts were handed out to the attendees at the first “eBay Live” convention.
“PayPal was once eBay’s fierce opponent but now it’s the auction company’s crown jewel,” says Jackson. “PayPal is eBay’s fastest growing subsidiary, which makes Google’s plans for an online wallet service all the more dangerous for eBay.” Google has indicated their payment service will not compete directly with PayPal, but Jackson dismisses this claim. And while far from being a Google sycophant -- Jackson is a vocal critic of the company’s decision to partner with the communist regime in China to censor search terms like “democracy” and “religion” -- the former PayPal insider does acknowledge that Google’s entrepreneurial culture could give it an edge in competing with eBay.
“EBay is burdened with a bureaucratic, PowerPoint-obsessed culture,” notes Jackson, a frequent source for business publications such as Reuters, Forbes, and BusinessWeek. “PayPal had a pro-entrepreneurial management team, but most of its members were pushed out after eBay acquired the company. And that’s unfortunate, since eBay could really use a healthy infusion of entrepreneurial spirit in order to tackle its problems.”
“It’s ironic that as eBay celebrates its ten year anniversary, the one person who might be able to help is the man who started it all,” Jackson adds. “Where is Pierre Omidyar, eBay’s founder? He’s an entrepreneur at heart who could shake things up if he got involved again. Pierre should follow in the footsteps of Apple founder Steve Jobs and return to run his company.”
Jackson’s book “The PayPal Wars” was the winner of the 2005 Writers Notes Book Awards for best business book, and it was also honored by USA Book News’ Best Books awards. The Washington Times hails it as “an absorbing insider’s story,” and Tech Central Station calls it the “rare business book [that is a page turner.” It was also a selection of the month by the Laissez Faire Book Club.
About World Ahead Publishing:
Headquartered in Los Angeles, World Ahead Publishing is the West Coast's premier publisher of nonfiction books. Our growing coterie of authors share our pro-freedom editorial ideals, and our books advocate the free market, limited government, the protection of liberty through law, and a vigorous national defense. To learn more, visit www.worldahead.com.
Contact Information:
To interview Eric M. Jackson, contact Special Guests at (630) 848-0750.
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