Events Calendar
In This Section
Matsos bottling a dressing that’s selling in 25 states
Economic survey: Job losses to bottom out in first quarter
Ohio gas up 12 cents from last week
SCORE offers wide variety of workshops
After 30 years at the helm of Akron Children's, Considine still looks to future
New version of Mozilla Thunderbird landing soon
Most Read Stories
Police accuse bank robbery suspect of gobbling up note (with dashcam video)
Victim of beating in Kent last week is declared dead at Akron hospital
Can DNA tests free ex-Akron captain?
Dad accused of forcing son into field, killing him
Man found dead in North Akron home is identified
Does it work? Test team returns to try out new products advertised on television
Blogs:
Pets:
Cat-loving chihuahua suckles seven abandoned kittens
The Heldenfiles:
Sunday Notebook
Patrick McManamon:
Browns sick after sick loss in Detroit
Akron Zips:
Zips advance to Sweet Sixteen
Tribe Matters:
Seven players added to Tribe’s 40-man roster
Cleveland Browns:
Post-game defensive quotes
Kent State Sports:
Kent State defeats Rochester College, 63-44
Cleveland Cavaliers:
Gameblog: Cavs vs. Philadelphia 76ers
Buckeye Blogging:
OSU – Michigan college football rivals meet in Baghdad
Varsity Letters:
Four area football teams play tonight
All Da King's Men:
The Sunday Sanity Challenge
Blog of Mass Destruction:
Will Health Care Reform Pass?
Akron Law Café:
Health Care Financing Reform: (69) The Brookings Institute Study on "Bending the Curve" – Four General Strategies
See Jane Style:
Vintage Chic
Car Chase:
TIME TO GET YOUR COLLECTOR CARS WINTERIZED
Let's Talk Real Estate:
Faye Dunaway to be Evicted?
Ohio Travels with Betty:
George is looking for a Thanksgiving buffet in Akron.
Sound Check:
Steely Dan Plays "The Royal Scam" at E.J. Thomas Hall
HRLite House:
Personal Rant – You are All Wrong About Jobs, or the Lack of Jobs, Being the Reason People Do Not Live in NEO
Akron Gamer:
Nintendo's Mario endures even as games come and go
Online marketplace's new chief making changes but still faces biggest challenge from Amazon
By Elise Ackerman
San Jose Mercury News
Published on Sunday, Sep 07, 2008
Walt Kolenda, also known by the handle ''Auction Wally,'' began selling antiques and collectibles on eBay 10 years ago.
But when Kolenda shops online, he goes to Amazon.com. Kolenda isn't one of those disaffected eBay sellers upset about recent changes in the online marketplace. He is just being practical.
''Almost without fail, the best price will come up on Amazon,'' said the longtime antiques dealer and auctioneer, whose recent purchases ranged from office supplies to a bass guitar.
EBay sellers made headlines in the spring when they rebelled against policies put in place by eBay's new chief executive, John Donahoe. The griping has continued with the start of a new rule that prevents identical listings from overwhelming eBay browsers.
But the disenchantment of eBay sellers, vociferous as it has been, poses a much smaller threat to eBay than the draw Amazon holds for buyers. Like Kolenda, these online shoppers are attracted by low prices and a less cluttered, more predictable shopping experience.
Once the undisputed leader in e-commerce, eBay is increasingly in danger of being eclipsed by its more nimble rival. Even as eBay tries to be more like Amazon — by pushing fixed-price listings and emphasizing trust and safety — Amazon is becoming more like eBay. For example, in addition to expanding beyond books and offering used items, Amazon just launched a checkout service that will compete with eBay's PayPal.
And Amazon has had some success: Shoppers are flocking to its site, while visits to eBay have fallen over the past year.
Analysts fear the competition between the sites, combined with the economic downturn, could bruise eBay's business and batter its share price. Tim Boyd, an analyst with American Technology Research, is going so far as to advise investors to sell eBay and predicts its shares, down about 38 percent from a high of $40.60 in October, could fall an additional 20 percent this year.
''EBay is hemorrhaging market share to competitors such as Amazon,'' Boyd wrote in a research report, noting that the value of the goods sold on eBay's marketplace had increased only 8 percent compared with the previous year.
In contrast, Amazon saw a comparable figure, its gross sales, vault by 41 percent.
EBay, based in San Jose, declined to make executives available to talk about the challenge it faces from Seattle-based Amazon. A spokesman emphasized that eBay's business, a three-legged combination of e-commerce, online payments and the Skype communication service, is unique.
Still, Donahoe is quietly tweaking eBay to make its marketplace more like Amazon. The challenge he faces is that every change aggravates eBay's seething mass of sellers just a little more. For instance, an adjustment to eBay's feedback system so that sellers can leave only positive feedback about buyers sparked a huge outcry.
The move was intended to fight fraud, but it struck sellers as unfair. So did a special deal eBay made with the site Buy.com. that is designed to give shoppers a choice of more items at fixed prices, with free delivery.
With 84 million users in 39 markets around the world, eBay can still boast of being the biggest online marketplace, but Amazon is quickly catching up.
According to comScore, a leading measurement firm, visits to eBay's U.S. marketplace began declining for the first time in August. Numbers continued to slip throughout the past year. In June, visits plunged 10 percent, to 73 million.
In comparison, Amazon grew, mostly in double digits. In June, eBay's worst month, Amazon visits rose 7 percent to 57 million.
''Amazon.com, to us, is the highest-quality company that we follow and could be building the most durable and sustainable competitive advantage,'' analyst Scott Devitt of Stifel Nicolaus wrote in a recent report.
EBay used to get these kinds of mash notes. Analysts gushed about the beauty of eBay's business model, which allowed it to become a top Internet retailer without ever holding any inventory itself. The darling of the dot-com bust, eBay's stock more than doubled from 2003 to 2005.
But what was once seen as eBay's strength is now regarded as a weakness. As a virtual player, eBay has limited control over transactions on its site. EBay can fight against dishonest sellers and deadbeat buyers. Ultimately, however, its marketplace is built on trust.
Amazon took a different and more costly approach. It built its own warehouses and a massive distribution network. As a result, Amazon can guarantee delivery. For buyers, that has made a big difference.
''Amazon is a retailer; it understands online commerce,'' said Derek Brown, an analyst with Cantor Fitzgerald, who was the first to warn investors of eBay's weakness. ''They own the experience from start to finish.''
Walt Kolenda, also known by the handle ''Auction Wally,'' began selling antiques and collectibles on eBay 10 years ago.
Get the full article here.
Comments
Click here to post your comments
