Has eBay stopped bidding on auctions?
Tuesday, August 21st, 2007Techcrunch recently reported that eBay lost $1bn of market cap. Combining this with reports from some sellers that “eBay is broken“, it is clear that it’s time to take a closer look at just what is happening with eBay.
Firstly, some facts sourced from eBay’s quarterly reports:
- eBay’s subscriber activity rate has declined from 41% in Q1 2005 to 35% in Q2 2007
- after a few quarters of fast decelerating growth, the number of listings it carries has actually fallen 6% in Q2 2007 (compared to Q2 2006)
- the average cost of a listing has risen from $1.72 in Q2 2006 to $2.31 Q2 2007 – a 35% rise
- eBay has announced it is launching a range of user-generated content services (such as blogs and wikis) as well as filling a few proposition gaps by launching services such as Gumtree and “kijiji” in the US market.
The chart below details some of this.
My source data is available here.
Before I go on, an important disclosure
I am a co-founder of Aroxo which will be a major eBay competitor when we launch in October 2007. I’ve sourced all the data above directly from eBay, although I have performed some calculations on these data myself. You can see what I’ve done here.
With that in mind, what follows are my opinions based on what I see happening in the market.
