The Ebay Miscalculation or the "Donahue effect"

The Ebay Miscalculation…. or the “Donahue effect”

Before going live with these changes, they should have lined up more big box accounts. C learly the new EBAY business model is:

We are Ebay. We are e-commerce, you don’t need to have your own website. We can be your e-commerce platform. In senior managements mind they want to be. for lack of better words. "The E-Commerce lifestyle mall" of the Internet.

They should have waited to roll out their changes until they were better organized but because Amazon beat them out in last qtr 07 they felt they had to do something. Their stock was dropping and they needed “something” to reverse the lack of confidence in the market.

They never imagined, based on the last boycott, that these changes would be a big thing. They calculated the loss of small accounts vs the staff they could cut to service them and said we can do this.

They forgot that sellers feel that Ebay belongs to them, if not financially at least emotionally. Many have built their livelihood on Ebay, Eay is part of our family and we care about it. They also forgot that many of us come from marketing, business, and “corporate backgrounds” and we can "spin" just as well as they can.

This is now ‘EBAY’ or “Greedbay” the big bad corporate gorilla vs. small mom and pops, single mother's and retirees. Despite their spin that this is 'noise", this boycott has achieved a huge amount of publicity and it is negative for Ebay. It is no longer that fun place, it’s a cold, uncaring corporation that has lost touch with how it became so successful.

They did not expect some of the power sellers to go, many more are doing their own store rollouts or moving en-mass to other sites.

They did not count the competitors (they weren’t really there at the last boycott). It looks "bad" in the public and stockholders minds, when there is statistical evidence that you are losing people (even if you wanted them gone anyway)

You have to wonder if GM and its dealers will ultimately want top hitch their success for EBAY whose "brand' if you will is severely tarnished, or will the other large e-retailers that Ebay wants to attract.

Their biggest mistake was in not spinning off the collectables side of the business into a new venue and selling it off. They would not have had any problem finding a buyer, but Ebay hates competition of any kind.

Oh and as the class action lawsuit becomes more public (it has been known about in financial circles since last year when it was filed). The public will further have a diminished view of the Ebay "Brand".

Ebay has spent millions of dollars on prime time advertising, including American Idol and these numbers still decline. Maybe their approach isn’t working, maybe they need a new voice, maybe they should hire “sock puppet” to be their new spokesman, we all remember what happened to Petco, they went under!