Amazon and Craigslist Batter eBay from Both Sides
eBay has reported that for the first time ever, their 4th quarter revenues fell from the previous quarter.
eBay is being squeezed from both sides. In fixed price listings, buyers (and sellers) are flocking to Amazon. At the other end of the spectrum, sellers are dumping their household stuff on free classifieds site Craigslist instead of posting auctions on eBay.
Since John Donahue took over from Meg Whitman as eBay's CEO in March 2008, he has led the revamping of the marketplace to be friendlier to fixed price sellers in order to compete with rival Amazon. But that hasn't stemmed the exodus of fixed price buyers away from eBay to Amazon.
For December's holiday sales frenzy, Amazon traffic rose 9.8% over the same month in 2007, while eBay traffic fell 2.5%.
"At the end of the day, if you compare the experience of buying fixed-price items on eBay vs. buying them on Amazon, Amazon wins," says Jim Friedland, an analyst at Cowen & Co. who has a neutral rating on eBay's stock. "It's such a better shopping experience."
It's going to be worse before it gets better. Lowering expectations for this quarter, eBay said it will miss analysts' profit estimates for 2009 Q1 by nearly 20%. "The company said first-quarter profits will be 32¢ to 34¢ a share, well below the 40¢ estimated by Wall Street", reports BusinessWeek.
Original post on : http://onlinebusiness.about.com
By Gregory G
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