eBay Inc. (NASDAQ:EBAY) is reportedly negotiating to buy stake in GMarket Inc. (ADR) (NASDAQ:GMKT)GMarket has solid market share in online auctions for the Korean market.  Interpark Corporation owns 37% stake in GMarket and eBay wants it.  eBay is primarily talking with Interpark Chairman Ki Hyung Lee.

eBay also made a preliminary filing with the Korea Trade Commission requesting approval for the transaction.  There isn’t any assurance about whether the transaction will be completed.  GMarket is partially owned by Yahoo! Inc. (NASDAQ:YHOO).  eBay has a division called Internet Auction, a competitor of GMarket in Korea.

Interpark has been shopping for buyers in their GMarket stake since 2007.  GMarket made $35.6 million in profit and $238.3 million in revenues last year.

Related Links:
1. WSJ
2. NYT

eBay Inc. (NASDAQ:EBAY) has found a large number of competitors taking away some of their business.  Ever since eBay changed their feedback and fee policies, many of the merchants that were exclusively selling goods moved to competitors such as Wigix, Oodle, Etsy, and Silkfair.  Many of these alternatives charge lower fees and are niche auction sites.

The new breed of auction companies are leveraging social media to benefit merchants in connecting with the customer.  Some of these sites offer how-to videos, blogs, and advertising within social networks. 

One of eBay’s primary advantages is their feedback system.  When shoppers buy products from the new sites, it is hard to tell how credible the sellers are. 

“I don’t need a million people to see my things, just the right people who have hopefully good taste to buy my things,” stated Cathleen McLain, a jewelry maker that switched to Silkfair from eBay this year. 

According to a researcher at Forrester, every $1 out of $5 spent online is either made by eBay or Amazon.com. 

Oodle is a classified advertisement site that aggregates content from more than 80,000 different sites.  Wigix focuses on fixed-price transactions and doesn’t use auction-style transactions. 

“We built our business around eBay,” stated Jerod Husvar, a merchant that switched away from eBay due to lack of strong customer support. “They lost focus. All their money comes from sellers. Buyers are what drive the market, but you need quality and protection for the sellers or else they don’t even want to deal with the buyers.” 

Husvar stated that eBay started recently offering phone support.  Before that, he often times found himself on hold for about 30 minutes while waiting to speak a customer support rep.

The changes made at eBay is a cross between feedback given by users and how it affects their bottom-line.   However, it is apparent that merchants aren’t happy with a lot of the changes.  Hopefully eBay and merchants can find a middle ground.

Related Link:
1. WSJ

It’s been about one month since eBay Inc. (NASDAQ:EBAY) won a lawsuit filed by Tiffany & Co. (NYSE:TIF).  Now Tiffany is appealing the court ruling to the United States Court of Appeals for the Second Circuit.  Tiffany claims eBay is responsible for counterfeit goods appearing on their online auction system.

“Tiffany’s decision to carry this litigation on after the District Court’s decision doesn’t do anything to combat counterfeiting,” stated an eBay spokeswoman. “The best way to stop counterfeiting is ongoing collaboration between companies, government agencies and law enforcement.”

Tiffany filed the lawsuit in 2004.

In late June, eBay lost a $61 million case against Louis Vuitton Malletier, Christian Dior Couture, and Parfums Christian Dior in a French court. 

Related Link:
1. Reuters

David Piper, a British millionaire has put his possessions up for sale on eBay.  This includes his title as the Lord of the Manor of Warleigh.  Piper is also selling two Bentleys, two hotels, and several paintings worth over £2 million.

“This sale is brought about as the present lord has been diagnosed with advanced prostate cancer,” stated the eBay advertisement.  “For sale as a whole or in part… Can include David, the existing eccentric lord of the manor, physically as well to a suitable purchaser.”

Piper is hoping to raise £4 million through the auction.  Over 100 bids have been made and the bidding is closing tomorrow.

“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)

eBay Inc. (NASDAQ:EBAY) has been making questionable moves once again.  This time it is in the form of making a deal with Buy.com.  eBay users have been moving to alternatives due to high listing fees and high PayPal fees.  Consumers also seem to prefer fixed prices rather than a constant fluctuation of goods.  This is why eBay made a deal with Buy.com which was a bad idea.

Now Buy.com can sell their millions of books, electronics, and other goods on eBay without having to pay normal listing fees.  The goods that Buy.com lists on eBay will be a fixed price. 

When eBay first started, the company was known for levelling the playing field for mom-and-pop shops versus bigger companies that sell similar goods.  The deal with Buy.com indicates that eBay has more interest in big businesses.

“Frankly, we are challenging some of the core assumptions that we have made about our business,” stated Stephanie Tilenius, GM of eBay North America. “Instead of focusing on being an auction business, we are looking at what it takes to create the best marketplace out there.”

Buy.com started in 1997, had an IPO within 2 years, almost died out with the dot-com bust, and then took themselves private.

If eBay continues to make deals that stirs away from their core strength in online auctioning, they may find themselves in a similar position as Yahoo!  A major shareholder may protest a shift in the company’s board and try to get the company to sell themselves off.

Related Link:
NYT

Max P. Sanders, a student at the University of Minnesota was arrested when he put up his vote for President for auction on eBay.  The student claimed it was a joke, but the Hennepin County District Court charged him with a felony.

“The rules are simple, the highest bidder will tell me who to cast my vote for in the election,” wrote Sanders on his auction post. “I will vote for any candidate of any party, as long as they are on the ballot.”  The headline for the auction was “I’m selling my vote in the Presidential Election” and Sanders’ username is zepdrummer612. 

The charge used against Sanders’ case was a count of bribery, treating and soliciting from a law that passed in 1893.  The court was able to get Sanders’ information by sending eBay Inc. (NASDAQ:EBAY) a subpoena.

“We take it very seriously. Fundamentally, we believe it is wrong to sell your vote,” stated John Aiken, a spokesman for the Minnesota Secretary of State. “There are people that have died for this country for our right to vote, and to take something that lightly, to say, ‘I can be bought.’

The auction did not receive any bids.

Ashley D. MacIsaac is taking an unorthodox approach to signing a record deal.  The bankrupt 33 year old, Canadian-born, fiddle-playing man has decided to put 50% of his future earnings for sale on eBay Inc. (NASDAQ:EBAY) at a starting price of $1.5 million Canadian dollars. 

MacIsaac danced to Celtic music on Late Night With Conan O’Brien in 1997.  On that same taping, MacIsaac exposed himself when kicking up while wearing a kilt.  “I’m 33, I have at least a good 40 years of earning power ahead of me and I think it’s (C$1.5 million) a reasonable starting point,” stated MacIsaac during a phone interview with Reuters.

“I’m not David Bowie, I’m not Madonna, I’m not Eminem, I’m Ashley MacIsaac, so to set a price at that (C$1.5 million), I thought, was fair market value,” added MacIsaac.  Madonna made a similar deal worth over $100 million when she signed with Live Nation Inc.  David Bowie also issued bonds of future royalties for his future hits as well. 

The winning bidder will get half of the profits made from the Celtic singers music album sales, movies, DVDs, and other publications until MacIsaac retires.  The first 10 albums created by MacIsaac was distributed through Universal Music Group. 

A court in France ordered eBay Inc. (NASDAQ:EBAY) to pay over $61 million to LVMH Moet Hennessy Louis Vuitton SA (OTC:LVMUY), parent company of Louis Vuitton, Givenchy, Fendi, Marc Jacobs, and Emilio Pucci.  Counterfeit products of LVMH were sold on the online auction website.

“If counterfeits appear on our site, we take them down swiftly,” stated eBay spokeswoman, Sravanthi Agrawal. “But today’s ruling is not about counterfeits. Today’s ruling is about an attempt by LVMH to protect uncompetitive commercial practices at the expense of consumer choice and the livelihood of law-abiding sellers that eBay empowers every day.”  The plans to appeal the ruling.

eBay also believes that LVMH is attempting to cut out the middle man and because they are uncomfortable with their business model.  L’Oreal SA, Rolex, and Tiffany & Co. have also sued eBay in the past for counterfeits.

The French court believed eBay was resposible for “guilty negligency” and for the “illicit sale” of perfumes not allowed through eBay as a distribution network.  LVMH also sued Google for $260K because of breach of trademark, meaning that Google had to stop displaying ads of LVMH competitors when searching for the company.

eBay is also facing a legal battle with Craigslist regarding the dilution of the stake that the auction company owns in the classifieds company.  Craigslist countersued eBay shortly after.  Stay tuned to Pule 2.0 for what happens next with all of eBay’s lawsuits.

[Source: AP]