Ford CEO Mulally says Jaguar not for sale
Megan Mullaly, however, needs cash and is looking to sell hers…http://news.yahoo.com/s/nm/20070107/bs_nm/autoshow_ford_mulally_dc_1
http://www.tvweek.com/news.cms?newsId=11296
Add comment January 8th, 2007
Well, so much for the series, but here’s another that’s just too easy:
Bush aims to balance budget by 2012
Cites 22nd Amendment to the US Constitution as critical to achieving milestone
http://news.yahoo.com/s/nm/20070103/pl_nm/bush_budget_dc
Add comment January 3rd, 2007
They appear to be giving up about $1,000-1,500 each in pure cash money to arbitrageurs. Seems silly, really.
http://www.marketwatch.com/News/Story/Story.aspx?column=Internet+Daily&dist=nwtid&siteid=mktw (second article)
Add comment November 15th, 2006
I never find enough of these for a series, but I always hope I do.
In this series, we find quotes that NEED the context of the story to prevent unwanted inference. Note the following quote by Tampa Bay starting QB Chris Simms:
“‘It comes natural to me,’ Simms told me. ‘I enjoy the guys. I enjoy the guys at all positions, not just the guys on offense. I try to hit every corner of the locker room, and I don’t view it as a job, or anything I have to do. It’s fun.’
From: http://sports.yahoo.com/nfl/news?slug=cnnsi-closingupcamp&prov=cnnsi&type=lgns
Add comment August 28th, 2006
Here:
http://investor.ebay.com/ReleaseDetail.cfm?ReleaseID=209064&FYear=
Whenever I read these press releases and associated commentary by the companies involved, I wonder what the negotiation looked like, what the sensitivities were, and what the ultimate deal means to each party with their chosen areas of focus.
It’s obvious at this point (after the Google and Yahoo deals), that eBay wants to own the click-to-call space with Skype and PayPal powering the introduction and transaction respectively. eBay appears willing to give away core search traffic (at least at the margins) and direct site searches to win this nascent space both in the US and internationally. They also want to continue to get large amounts of traffic inbound from Google and Yahoo.
Since Vendio’s Dealio service provides a robust toolbar experience geared toward comparison shoppers, I always review this section of releases more than others may focus on those areas. In the Google deal, eBay is distributing the Google toolbar (with the addition of the Skype button). In the Yahoo deal, eBay is co-branding with Yahoo a toolbar with the functionality of both properties. I’ll be curious to see how the Google Toolbar is presented during Skype download (and if it is for US downloads). If so, I wonder how Yahoo feels about that. And who gets the inevitable web search box in the Skype client itself? All the other IM services have one, so it’s reasonable to think that real estate has value (despite the fact that Search eBay hasn’t appeared yet). Then again, Shopping.com PPC ads haven’t reached the eBay.com site either….
On one hand, I find eBay walking the middle between these partners strategically brilliant. On a practical note, I expect the ongoing partner management to be extremely challenging here in a flattening world. No matter what, it will be interesting.
Add comment August 28th, 2006
While not widely publicized, AuctionBytes did cover the story of eBay dropping the Keywords program.
http://www.auctionbytes.com/cab/abn/y06/m08/i24/s01
I have to admit I have been skeptical of this program from launch. To me, it was a bit improperly positioned. As an eBay seller, you expect eBay to deliver a sale or at least the opportunity for a sale based upon listing fees and FVFs. This program didn’t allow anyone to direct traffic off of the eBay site, so it was primarily another listing (or store) upsell at a per click rate. I’m sure some were successful with the program, but it probably didn’t take off like it should have given the general adoption rate of the various listing upsells (gallery being an exception).
I sincerely hope they don’t throw away the code used to enable sellers to bid and track the performance of the ad spots in the Keywords program. If eBay later realizes that this system should be leveraged to drive more revenue from featured listings through competitive per click bidding, I’d hate to have them start over again from scratch.
Add comment August 25th, 2006
With reports that about 50% of the 8,500+ folks entering this year’s World Series are so-called “online qualifiers,” and much discussion about pending legislation that confirms online poker is illegal; could this year’s $12MM winnings for the last person standing be the largest we’ll ever see?
http://news.yahoo.com/s/ap/20060805/ap_on_hi_te/online_poker_s_future
Add comment August 5th, 2006
While on vacation, eBay announced several changes to pricing for SIF and other site changes that will enhance exposure of core listings at the expense of SIF, including in eBay Express–eBay’s major search initiative for 2006 (actually a micro-site).
These changes were met with a wide variety of reactions to eBay’s attempt to “re-balance the site.” Since I’ve been working with eBay and eBay sellers since before there was a SIF (before there were eBay Stores) and before BIN (Buy It Now-Fixed Price sales in Core), I have a long history of watching how the marketplace reacts to pricing changes and new options. I’ve also tried to understand all the underlying motivations for these actions.
The underlying motivation has something to do with money, always, but in this event, it also relates to strategic position. The auction market is a natural monopoly—buyers bring sellers, who bring more stuff to sell. The auction model necessitates a critical mass of buyers, and more buyers drive higher prices (bidding against each other). But what about fixed price sales? Well, it’s good to have more buyers to drive sellers but the externality is significantly weaker. Note, the stiff competition in many Asian countries has less to do with funding or consumers than the type of market these are. gMarket competes well with eBay Korea in many ways because it’s more of a fixed price market with a weaker externality. US, Germany, Japan were winner take most (or all) markets. Fixed price markets won’t have the same dynamic.
Ok, I see the motivation (grow the auction business to shore up the externality). But is this rebalancing the answer? In a nutshell, my thought after reading the announcement is “right problem/wrong solution.” This has turned into an incredibly long post, but there is a lot at stake here for sellers, eBay, and, in fact, our business at Vendio. Frankly, it deserved the time and why not make up for two months off with a nice long post?:).
I’ve come to accept that in addition to the negative revenue implications February’s inclusion of store items in search had, eBay also experienced an issue with the buyer experience. Simply, buyers got confused somehow, and items didn’t convert (sell) as well.
Evaluating this situation, eBay first decided to roll back the SIF in core decision and figure out a better solution. At eBay Live, we heard Bill Cobb state that eBay would never go back to SIF in core to the audible dismay of many in the audience.
Now, a month or so later, eBay announces not only that SIF will not be back in the core search, but also SIF will be a much more expensive option. In short, having stale (and possibly “overpriced” inventory in search led to a poor buyer experience and reduced inventory turns for sellers). I actually had predicted (but fortunately not posted:)) that pricing would increase for SIF along WITH inclusion in core. It sets up the option to have differentiated pricing for search—one blended more in favor of a higher listing fee and one blended more toward a success fee (lower listing fee/higher FVF). I was obviously wrong, but then again, I’m tainted by the fact that Vendio indeed uses exactly this blended pricing model to reflect the fact that some sellers have a higher sell-through and higher sales pricing and others have less expensive items and perhaps sell at a lower rate (www.vendio.com/pricing.html). Note that Vendio pricing does result in a lower take rate given seller efficiency of selection, but it provides a higher overall revenue amount by enabling third degree price discrimination (http://en.wikipedia.org/wiki/Price_discrimination).
Seller reaction has been pretty negative, although some welcome the refocused effort on the core (probably included are many who sell items more appropriate for auction-based pricing, including large liquidators with items of unknown value and antiques/collectibles, of course).
Now, a “rebalancing” implies that more items now appear on core listing options (auction and BIN) vs. eBay Stores, compared to today. The fastest rebalance involves taking some Store items and moving them over to core. Unfortunately, this new pricing has the distinct possibility that items will move from eBay Stores to some non-eBay alternative (or eBay ProStores) that was cheaper than the old eBay Store pricing already and is relatively even cheaper now. If eBay Stores volume goes down and core remains flat, we have a problem at eBay. The market is more “balanced,” but it is also less valuable in total.
By way of comparison, let’s review the alternatives for a seller’s Store needs.
Some of the most popular are eBay Stores, eBay ProStores, Yahoo! Stores, a DIY hosted store, or a Vendio Store/Monster Commerce/Andale Store. Here is a table of pricing for the various components:
Monthly Fee Listing Fee FVF
eBay Stores $16-500 5-10 cents 3-10%
ProStores $7-250 NONE .5-1.5%
Yahoo! Stores $40-300 NONE .75-1.5%
Vendio Store $5-15 NONE 1% or 10-20 cents
A DIY hosted store will only have a monthly hosting fee, likely $8-30 and no listing or transaction fee.
Given these compelling options, why would one sell on an eBay Store? Obviously, eBay Stores is more than just a pretty place to have inventory to justify these prices. An eBay Store provides a couple of key additional benefits (among others). First, your eBay Store leverages eBay’s brand (and user experience and feedback system) for additional buyer comfort that makes sales easier. Second, eBay Stores items do get exposure for eBay buyers using core search (although at a significantly more limited rate than core gets). Here, Bill Cobb points to the reduced turns that eBay Stores have compared to core and points to seller incentives. I point to the sell-through issue being more related to where eBay is leading the ants coming in the front door. If it’s harder to find Store items, they’re going to sell worse, even if the merchant pricing and incentives are the same. So it’s less of a seller incentive issue here than an *eBay* incentive issue:).
Now that you’ve raised store fees on average by 6%, what have you asked sellers to do? List less, certainly, but what about the items that are listed? Do you think they may try to increase prices to cover the fee increase (much like they do when the USPS raises shipping rates)? Does this higher pricing for buyers lead to more GMV through the site? Is that a desired effect (to have fewer good deals)? I can argue here that a way to rebalance the site could also have been to announce a price DECREASE in core simultaneously with a Stores increase, but that would be opening a large hornet’s nest.
Alternately, sellers whom eBay taught to sell at fixed price in stores will now look at other alternatives. Vendio Stores have seen a boost, and I’m sure Yahoo and hosted stores alternatives (and ProStores) have seen similar gains. But, you say, that doesn’t get your items exposure. That’s the perfect lead-in to the punch line of my initial thought “Right problem/Wrong solution.”
You have to break down the value stack eBay brings to merchants into its key individual components. Clearly, eBay provides merchants 1. Buyer demand, 2. Buyer trust in the eBay platform (UI/feedback/checkout/etc.) and 3. Reliable place to display “virtual” inventory. Other values exist, but these are three key areas. Another way–merchants think, “I need to expose my items to the world, and I need buyers to come in to see it and feel comfortable buying it.”
ProStores and others have Reliability, but not the other two components. eBay Stores has Buyer Trust and Reliability and *some* buyer demand. Core eBay has all three.
With non-eBay solutions, merchants need buyers to come in and trust the purchase experience. Here, Yahoo Search and Google AdWords and affiliate programs and off line ads and e-mail marketing, etc. are all options that should get a lift as merchants seek buyers (yes, the pricing change is good for Google). And Google also announced their work on a feedback system for merchants (in addition to Google Checkout) to provide buyer trust. Yes, eBay just helped feed their biggest competitive threat. Note, Yahoo Shopping, BizRate, and others have ratings as well that can help provide trust.
So that really leaves a core eBay value being buyers. I know that’s obvious to most, but worth reiterating. Similarly, search companies bring leads as well, so let’s compare the search market with eBay. In the search market, MSN, Google, and Yahoo all shout from the rooftops their “index size” (http://searchenginewatch.com/showPage.html?page=2156481). eBay also touts the work of Chris Anderson and the long tail (http://ebaydeveloper.typepad.com/dev/2006/07/a_closeup_view_.html). So in search, we want a ton of content to be available, so no searcher goes unsatisfied. But eBay is arguing buyers are being confused by TOO MUCH CONTENT and raises prices for the biggest area (eBay Stores) to get rid of some of it.
My belief is that the problem isn’t too much content, but an inefficient mechanism for providing buyers the best buying option when they search. The problem is with the search engine not doing a good job displaying to buyers items of best match. While other comparison shopping engines are scraping the world’s servers to get the most shopping options for consumers, eBay is *limiting* what buyers can find in the hopes that the items remaining will be good buying options. It’s a high-risk game, and I don’t like that answer.
A brief aside on irony and bad timing. When Vendio started as AuctionWatch 7-8 years ago, we provided a Universal Search to let buyers see items across various sites. It was quite successful at driving leads to eBay and other auction sites. Today, eBay would love us and try to help us in any way to drive more. At the time, eBay tried to technically block us, famously threatened to sue us, and eventually succeeded at convincing us to cease providing this compelling buyer experience. Obviously, eBay’s worry at the time was that having a place for more comprehensive search would potentially lead more buyers to that solution, and if people could see items at Yahoo and Amazon there, well, that’s not so good. If you can only find the content at eBay, buyers will be forced to the front door/search box there. Ironically, at the time, eBay was probably right to be concerned. If the same group that understood that dynamic had looked at that problem in a broader context, they would have recognized the coming Google problem much in advance. Today, if you couple eBay’s SEO efforts with incentive-based content limits (i.e. higher selling fees), you are basically begging people to start searching at Google to get all the items possible, since you can assume eBay’s stuff with be there, too, if that’s the best option. Ok, aside is over.
Of course, it’s easy to say you don’t like the solution and never produce a competing alternative. It’s obviously a vexing problem, but below are my 2 keys to correcting the problem.
First, change the “standard” listing and final value fees to a variable scale that is category dependent. First run textbooks have very thin margins. If you want buyers to find textbooks on eBay, you need better marketplace seller pricing. Other categories have better margins generally (somewhat depending on demand that drives auction pricing).
Second, dramatically change the structure and pricing for featured listing placements.
The restructure involves a) shrinking this section to a manageable number (yes, like Google does with AdWords), b) identifying an appropriate algorithm for display that includes seller fees for that item, the item performance (how many folks visit it), the seller’s historical performance (i.e. does this seller give good pricing generally), and other data that may be available, c) don’t sort this section by time to close (it’s not going to be so big a section that causes issues for buyers finding the one closing soonest), and d) have this section appear on all search results pages above the main results.
The pricing change is equally sweeping—change the featured pricing away from the wickedly inefficient flat rate to variable rate pricing. How inefficient is it?—of 1,813 pages of DVDs and HD DVDs, featured listings make up LESS THAN A SINGLE PAGE (0.05%)! In Laptops/Notebooks, there are 113 pages of items and nearly 7 full pages of featured listings (OVER 6%!). Could there be a problem here that category featured placement in both cases is $19.95, more than the cost of most dvds (other than boxed sets) and a small price to pay to sell a $1,000 laptop?
eBay was popularly thought of as an “auction site” before it became the world’s marketplace. Why? Auction pricing provides the only way to get to first degree price discrimination, where “price varies by customer.” (see wikipedia again) Overture and Google both recognized this dynamic when implementing their paid search programs as well (bid for placement). Everyone can pay up to their comfort level (and yes, many overspend/overbid), but selling fees are DEFINITIONALLY a comfortable amount for everyone to spend! Google, Shopping.com and others have minimum bids to keep the junk away. In the eBay context, the category minimum selling fees in the First part of this solution outline are the equivalent to minimum bid pricing for search engines. Sellers will then be able to bid additional amounts for premium search engine exposure in core by bidding to raise either the listing fee or FVF amount the seller is willing to pay (which gets fed into a big analytics machine eBay can use to see which helps them drive more eBay revenue in exposure). Store items and core items could be treated the same here, btw, since the analytics machine would take the total take rate (base fees plus featured bids) when determining featured placement.
Flat rate pricing always looks great—no mental transaction costs (i.e. easy to understand). But it’s always absolutely the wrong price for the VAST MAJORITY of people (logically assuming demand is a curve (or multiple curves in eBay’s case) and not a single point). When eBay raises prices, some can absorb them and continue selling. Others simply go out of business. Others could in fact bear an even higher price, but eBay can’t raise pricing that much because even more sellers would be put out of business. There really isn’t a market clearing price here. The situation is aggravated by having a single pricing structure used to sell laptops AND dvds.
Note, I haven’t disrupted the fundamental eBay tenant of a level playing field for selling reasonably similar goods. Everyone has equal access to pay what they are able. If someone has a better source of supply or merchandising ability, that’s great. If they feature some items and use something like Vendio Gallery to cross-promote to get a better blended rate, great. Can everyone still sell items on the platform without going through this mental math? Absolutely. They may not spend as much (or too much for featured without the ability to test and analyze) or get as good a sales price, but neither are as important for the casual garage cleaner as the professional eBay seller who will invest in tools to help them sell more efficiently (an established market for these services exists already in paid search, btw).
Are there problems with this pricing, like the additional mental transaction costs and the systems development required to optimize the algorithm? Absolutely, but if the pricing enables more sellers to return to the platform with valuable merchandise priced attractively (particularly if the category pricing lowered pricing generally (made up by featured placement fees to make the take rate equivalent)), and enables better deals to be found by buyers with the ultimate benefit of more eBay GMV, indeed, it would be a small “price” to pay….
Add comment August 4th, 2006
It has been a busy summer. Vendio has been a lot of work, and then eBay Live was a week in Vegas. We announced our majority stake in Andale at eBay Live, and we’ve had a bunch of activity over the last few months as well with Dealio and other initiatives.
I also took my first full vacation in a couple of years, and I didn’t spend it writing. I got some reading done, so I’m more equipped to comment on what I see. Apologies in any event for being absent lately.
Add comment August 1st, 2006
Michael Effle
San Mateo, CA
Small town guy from Nebraska who's been blessed by education to see more of the world than he knew existed and experience a more diverse group of friends than existed in a 100 mile radius of his home town.
Married to an amazing woman who is also an amazing chef in San Francisco.
I manage the Sales Management business for Vendio, a leading eBay Certified Developer. Many of my opinions spiral into jokes, but not all. It's your job to figure out which are which.