eBay Eats Tiffany’s Breakfast and Profit Soars

“This was a strong quarter and we are very pleased with the performance of the portfolio, particularly with the growth generated by PayPal,” stated eBay CEO, John Donahoe. “We remain confident in our strategies to improve the customer experience as we manage in an uncertain economic climate.”

eBay Inc. (NASDAQ:EBAY) has seen their profit soar this quarter.  eBay’s net income rose by 20% to $568 million compared to last year.  Revenue grew to $2.2 billion and equates to a 20% rise since last year as well.  eBay’s growth was due to an increase in advertising, classifieds, and PayPal.  eBay acquired PayPal for $1.5 billion in July 2002.

Even though eBay is enjoying strong profits, their users haven’t been very happy with a lot of the feedback changes, increase in fees charge to sellers, fixed-price listings, and the partnership with Buy.com.  eBay has also made an enemy with classifieds company, Craigslist.  eBay has a large stake in Craigslist, but they sued them for diluting their ownership and then Craigslist sued them back for starting a competitor, Kijiji. 

“When you have 84 million active users, any time you make a change, someone is going to be upset,” stated Donahoe in a call with investors/analysts. “But we listen and we incorporate their feedback with what we believe is best for the collective good of the marketplace.”

In another victory for eBay, a judge has ruled that the auction company was innocent from a lawsuit that they were slapped with from Tiffany & Co. (NYSE:TIF).  Tiffany is angry that thousands of fake bracelets were being sold on eBay.  Tiffany went as far as calling eBay a “rat’s nest” of trademark violations.

“It is the trademark owner’s burden to police its mark,” stated U.S. District Judge Sullivan in New York. “Companies like eBay cannot be held liable for trademark infringement based solely on their generalized knowledge that trademark infringement might be occurring on their websites.”

Late last month, eBay lost a $61 million case against Louis Vuitton Malletier, Christian Dior Couture, and Parfums Christian Dior.  Tiffany may appeal to a higher court, but until then it’s been a good month to be eBay.

Related Links:
NYT: (eBay profit source)
Boston.com (Tiffany case source)

This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at

eBay Eats Tiffany’s Breakfast and Profit Soars Comments

  1. Vikash Shah says:

    The thing that worries me about eBay is their core business was creating a “marketplace” that supported buyers and sellers, their recent activities and decisions makes me think they are only focusing on creating a “marketplace” for buyers.

  2. EBAY REFUGEE!! says:

    Ebay’s stock just fell almost 15% today after the stockholders realized (after the latest quarterly earnings were published yesterday) that this site is no longer the site that everyone loved!

    The new CEO has taken amazing and horrific steps to alienate millions of sellers (WHO ARE BUYERS ALSO) which in turn, and is simple math, hurts the companies profits! Ebay…your site was centered around being a great marketplace for that unique item. You have now killed that idea and I am glad to see you are getting what you deserve for treating your customers, THE SELLERS, like this as well as NOT doing what you were paid to do, and that is to police your own site and make it safe for people to use!! To all stock holders…heed my warning…get out now!!! The NOISE just got louder!

  3. bad timing says:

    The timing couldn’t be worse to move away from the flea market. In a tightening economy, ebay should be the place that benefits by being the venue for great deals for people trying to cope with new economic realities. The last dip, ebay did in fact benefit. Sales went up. They just made a huge move away from precisely the niche that would have boosted growth and given them the edge.

  4. amit chowdhry says:

    i wholeheartedly agree with the last two comments… giving buy.com the ability to list fixed price items and not charge them for it screws over their ’84 million active users’

  5. Vikash Shah says:

    Does anyone have a timeline of decisions made my eBay since John Donahoe became CEO? Amit?

    bad timing – I think you made a very VALID point that in this type of economy we need to encourage opportunity for the individual not bring in corporations to compete.

  6. tim w says:

    all i know is that louis voutton and dior won the case but a lot of their goods are still showing up on auctions

  7. EBAY REFUGEE!! says:

    All they had to do was the job they are paid to do. Police the site and make it a safe and secure environment for both buyer AND SELLER. Instead they did nothing. Post 6 backs that statement!

    Customer service is among the worst on the planet, and all the claims of stepping up efforts to protect sellers has fallen 100% SHORT! They posted hundreds of thousands of fake auctions in Feb to fool stockholders into believing that the strike was having no effect. Well they guessed wrong again. They got caught and the strikes, all the “noise” as well as tens of thousands of sellers leaving DID HAVE AN EFFECT!

    If a downward spiral is the direction they wanted feebay to go by placing Donahoe in the CEO position…well it worked!

    You have no one to blame Ebay for these bad things happening to you, but yourself!

  8. ebay sucks says:

    seriously… go out of business already..

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