Whitman and Cobb at an eBay Live panel in June
It appears eBay was sending Wall Street analysts signals about impending changes to its fee structure back in May, but caught its sellers off-guard when it actually announced an increase in eBay Store fees on July 19.
A Merrill Lynch research report dated May 25, 2006, predicted eBay would change the fee structure for sellers. The report states, "At a competitor conference, eBay management suggested that sluggish US core listing growth, an overhang for the stock, would most likely change when management adjusts the core and store listing and final value fee structures to "rebalance" the site. We expect fee structure changes targeted at reaccelerating core domestic listings growth."
The prediction appears to be based on comments made by eBay CEO Meg Whitman and CFO Bob Swan at the Goldman Sachs Seventh Annual Internet Conference the same day. Whitman and Swan discussed "levers" eBay could pull to help it rebalance the marketplace, including pricing levers. In a response during a Q&A session, Whitman said, "We are looking at listing fees, Final Value Fees, insertion fees as all levers that we can utilize to rebalance the marketplace. But at least the current intention is not to reduce core pricing, necessarily."
The Merrill Lynch report stated that, "The eBay Live seller convention in mid-June could be the appropriate forum to communicate changes in our view," but eBay gave no indication to eBay Live attendees it was considering changing its fee structure.
Since the July 19 announcement of Store fees increases, which take effective August 22, Whitman's off-message comments to Wall Street analysts have angered eBay sellers. She was widely quoted in press reports when she told analysts, "The marketplace has been overwhelmed with identical, often poorly-priced items that have diluted the magic of the eBay experience." Sellers have also pointed with some skepticism to a statement Whitman made to investors on August 1 comparing current seller reaction to that of last fee increase. "I probably got, in the last 2 weeks, I probably got 15 angry emails. A year ago, I probably had 5000."
Meanwhile, sellers have posted on eBay boards and other online venues messages condemning the fee hikes, threatening strikes and boycotts, and even begging Google to create an alternative auction site.
http://rsch1.ml.com/9093/24013/ds/7876_348.PDF
http://investor.ebay.com/calendar.cfm
http://forums.ebay.com/db2/thread.jspa?threadID=1000334844
http://forums.ebay.com/db2/thread.jspa?threadID=2000194484
