EBay is to switch its emphasis from online auctions to Amazon.com-style fixed priced listings, after the US company confirmed it is replacing CEO Meg Whitman with John Donahoe, currently president of eBay’s auction business.
Whitman will retire in March, the company confirmed yesterday. Donahoe lost no time announcing things will be different under his reign. Within an hour of his appointment being announced, he told analysts that the company must move “quickly and aggressively” to make eBay more appealing to buyers and sellers.
In an effort to reinvigorate growth of the core eBay site, Donahoe said he would shift eBay’s emphasis from auctions to fixed priced listing.
“Auctions will always be the core of the core of eBay, it’s what makes eBay unique,” Donahoe said. But he noted that fixed priced sales already account for 40 percent of eBay’s marketplace revenue, and are growing.
“We are following our users. They like convenience so what we are simply doing is putting a more explicit focus on that,” he said.
Donahoe said the company will also announce a new fee structure next week, featuring lower upfront listing fees and higher final sale fees.
EBay shares dropped about 9 percent after the company said it expects 2008 revenue of US$8.5-8.75 billion, which at its midpoint represents 12pc growth far below the US$9 billion, or 18pc growth, that analysts had expected.
Sales in its latest quarter were up 27pc at $2.18 billion but growth was led by non-auction business such as the retail-like “fixed price” sites, like PayPal, with 35pc revenue growth; Web phone company Skype; ticketing site StubHub; and classified ads and other advertising.