EBAY: Active User Base About To Start Shrinking

eBay’s stock is so cheap that it almost doesn’t matter what’s happening with the business. Now that the company has a new CEO who is focused on the business, moreover, we expect to see some improvements.

Regardless, it’s important to understand what’s happening with the business. To wit:

eBay’s buyers and sellers are fleeing the site. Why? Because:

  1. You can’t find the stuff you want to buy, and
  2. You can’t sell stuff people can’t find.

The main problem is the site interface and search. Ancillary problems include high prices (especially on upfront listing fees) and fraud fears. eBay’s new CEO, John Donahoe, says he is focused on all three. And he’d better be.

eBay axe Scot Wingo breaks the problem down in detail:

The active user growth trend worsened [in Q4]. Check out slide 8 in the handout. Here’s the quarterly trend for active user growth: 14%, 10%, 7%, 4%, 2%. There are some adds (stubhub for example) and deletes (china?) in here. My guess is true organic active user growth probably went negative in Q4. Certainly in Q1 no matter how you slice it, it will go negative.

If eBay wants to get its business on track again, it’s going to have to reverse the active user trend and get it growing again. Get cracking, Mr. Donahoe!


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