Ebay is a brand in trouble

Never mind ebay's business model or stock price. This is a company whose brand is in trouble. Just a year or so ago, people I know who buy and sell on ebay would talk about the ebay
David Kiley

Never mind ebay's business model or stock price. This is a company whose brand is in trouble.

Just a year or so ago, people I know who buy and sell on ebay would talk about the ebay "community" and the fact that it's "the only place to be," for online selling. Since the company raised its prices to sellers earlier this year, though, there are defections to overstock.com and even amazon.com, and others. This is anecdotal, but out of ten of the people I know who regularly sell on e-bay, four say they have gone elsewhere and two say they are cutting back on using ebay.

I spoke with one former ebay executive last week--a pretty high-up guy when he was there who still has friends at the company. He says his friends say it's like working for Sears. Yikes. It seems to me that part of what drove ebay's success was not only the business model, but the culture that emanated through the site and services from enthusiastic employees who were on to the fact that they were doing something far smarter than Sears or even amazon.

Ebay's stock is trading at almost half its 52-week high despite continuing to make money. One wonders if ebay has simply become as complacent as General Motors became in the 1980s, figuring that Toyota and Honda would never amount to much, and that people would prefer a used Buick to a new Hyundai. Ebay is still a market share leader by a big margin. But investors and Wall Street tend to value a stock based on what they think future performance will be. Looks pretty bleak.

Ebay is one of those brands that doesn't really need to advertise very much. But it would be a good idea, for example, for CEO Meg Whitman to stand in front of the camera, admit that price hikes were out of line, roll them back and thank the people who make ebay tick. But that's just one free idea to Ms. Whitman.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE