eBay Trying to Fix Fraud, Buys Fraud Sciences

Now that Meg Whitman has retired, eBay has to fix three more problems:

  • prices (too high)
  • interface (cute in 1996, outdated in 2001, appalling in 2007)
  • fraud (small in grand scheme, but scaring buyers and sellers alike).

(And, yes, the company also has to sell Skype).

The pricing issue will hopefully be addressed at this week’s seller convention, and new CEO John Donahoe is talking a good game with respect to the interface. And now eBay has bought Israel-based Fraud Sciences to help address the fraud problem. The price? A not-negligible $169 million (NYT).

It’s true: Credit card fraud is only one of eBay’s two big fraud issues; the other is counterfeit goods. Better credit card fraud detection should help sellers spot product thieves, however, so the (expensive) acquisition should be a step in the right direction.

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