EBay Inc., the biggest Internet auction marketplace and parent company of Paypal and Skype, announced today that it is tweaking its feedback system.  EBay’s feedback system is when buyers and sellers give each other testimonials based on how well the transaction went.  The options are Positive, Negative, and Neutral.

Ever since eBay started its operations in 1995, buyers and sellers have been exchanging feedback since Day 1.  This is a huge change for the company.  But starting February 20, sellers will no longer be able to give buyers negative ratings.

The sellers won’t be happy.  This is a loss of bargaining power for them.  

This announcement is coming shortly after eBay CEO, Meg Whitman announced her resignation and that there have been some price fluctuations.

“When the seller leaves a negative feedback for a buyer, it drives them away from the site,” stated Steve Grossberg, President of the Internet Merchants Association. 

As a side note, there are rumors that eBay may consider selling off Skype if the product does not meet certain performance goals this year. 

With so much happening at eBay, they seem vulnerable for other competition to step-up against them.  Google attacked Yahoo! when they were restructuring as did Facebook when Friendster was restructuring.  Amazon just reported a solid quarter so it will be interesting to see how eBay responds.

[Source: Associated Press via Yahoo!]
 

The CEO of eBay Inc. (NASADAQ:EBAY) is getting ready for retirement.  Whitman started her role as CEO in March 1998 and may step down within a few weeks.  John Donahoe, President of eBay’s Auction Business division will be taking the CEO role after Whitman steps down officially.

Whitman is stepping down at a time where eBay is experiencing a slow sales growth.  Because of this, the company may change around by charing higher fees for listing.  eBay may also simplify its web site.

Whitman held the CEO role through some of eBay’s most prominent events from going IPO in September 1998, to delivering 40 consecutive quarters of revenue growth, to overseeing 248 million registered accounts and 15,000 employees, while managing the revenue growth of $86 million in 1998 up to $5.97 billion last year.  Whitman also oversaw major eBay acquisitions such as Skype and PayPal.

John Donahoe is a former Managing Director of Consulting at Bain & Co.  Donahoe and Whitman worked together at Bain. 

“Meg Whitman was my ‘first boss’ at Bain and I am delighted to be working with her once again. I look forward to getting to know eBay’s community, people and business,” wrote Donahoe to some of his colleagues at Bain when leaving the consulting company. 

Pierre Omidyar started eBay in 1995 as an experiment.  The rest of the board’s profile can be found at:  http://pages.ebay.com/aboutebay/thecompany/executiveteam.html.

[Information Source: Wall Street Journal - EBay Chief Whitman, Web Pioneer, Plans to Retire]

[Image credit: Wikipedia]

After Niklas Zennstrom recently stepped down from his position as Skype’s chief executive to pursue other entrepreneurial ventures, eBay began to question whether their investment was really worth it. “He could have continued to run the company, but he wanted to focus on new opportunities. He’s an entrepreneur at heart,” stated eBay spokesperson, Hani Durzi.

eBay will be shelling out $1.43 billion for Skype-related payments this quarter. About $900 million will be for a write-down of Skype’s valuation and $530 million will be used to settle future obligations. The $900 million is based on impairment, meaning that eBay overvaluated Skype when they acquired the company in 2005 as part of a $2.6 billion agreement.

(more…)

eBay Inc. and Google Inc. recently settled their differences. eBay was not happy with Google’s PayPal alternative, Google Checkout. After all, eBay bought out PayPal for $1.5 billion in stock back in July 2002.

Two weeks ago, eBay decided to halt being a client of Google’s AdWords campaign, but then decided to reenlist. However, eBay won’t be ordering as many ads as before. This is a blow to Google since eBay is one of their largest clients.

“At a recent conference for eBay merchants held in Boston, Google organised a rival party as part of a campaign to lure eBay users to its Checkout service, launched last year, which is attempting to topple PayPal’s monopoly on online payment,” wrote Jonathan Richards of Times Online UK^[1].

eBay now plans on spreading advertising efforts by signing as a client with Google’s competitors, Microsoft and Yahoo! as well as use Google AdWords. It is not yet known how much less eBay will spend on Google, but it will definitely put a dent on the $100 million in revenues that Google has supposedly made from eBay. eBay also previously had roughly 188 million ads positioned through Google AdWords.

As a side-note, many ambitious entrepreneurs had stints with working at PayPal including Chad Hurley and Steve Chen of YouTube, Reif Hoffman of LinkedIn, Scott Banister of Slide, Jeremy Stoppelmann and Russ Simons of Yelp, and David Sacks of Geni.com.

Reference(s):
[1] Times Online: eBay ends tiff with Google

“StumbleUpon[1] is a great fit within our goal of pioneering new communities based on commerce and sustained by trust,” stated Michael Buhr, a senior director at eBay Inc.[2] “StumbleUpon’s downloadable toolbar provides an engaging and unique experience to its users, but it is the similarities in our approaches to the concept of community that make it such a compelling addition to eBay[3].” Yesterday, eBay announced that the company would acquire StumbleUpon for $75 million.

StumbleUpon has roughly 2.3 million users and is known for the social network that revolves around the toolbar. The StumbleUpon community grew 150% and makes 5 million recommendations every day.

“We’re excited about joining eBay, as we share the same values around community and we look forward to working with them to accelerate our growth,” stated Garrett Camp, a StumbleUpon founder. Michael Buhr will now be serving as a general manager for StumbleUpon. StumbleUpon was formed in 2001 and is based in San Francisco. The other two founders of StumbleUpon include Geoff Smith and Justin LaFrance.

For those who do not understand how StumbleUpon works, the below screen shot should explain it:

Image credit[4]

[1] StumbleUpon.com
[2] eBay.com
[3] Business Wire: eBay Acquires StumbleUpon
[4] StumbleUpon >> Technology

Newsvine users were greeted today by an e-mail announced the relaunch. Some of the new, highlighted features include a smarter front page, local headlines & weather, group creation, a live news ticker, a photo gallery, and external RSS feeds.

The new front page has a clean look and users are able to customize their pages fully with their content of preference.  Selecting content is as easy as drag and dropping.  Another new feature on Newsvine is that you can enter your zip code and find local news and weather.

There are over 600,000 users active on Newsvine and now they can associate with and create groups.  Every user has the power to comment on any news story and Newsvine Live tracks the activity of commenting users.

Newsvine has also found a way to consolidate pictures from different news sources in the form of a slideshow.  Today’s big story is that England Prime Minister, Tony Blair is retiring and Newsvine consolidated 6 pictures in a slideshow of the PM.

Newsvine is based in Seattle and was launched in March 2006.  The company was founded by former employees of Disney and ESPN.  The company is funded by Second Avenue Partners.

Mike Slade is on the Newsvine Board of Directors.  Slade works as an advisor for Apple and started Second Avenue with a few other former Microsoft executives.  Slade is also a board member of StubHub which was acquired by eBay recently for $310 million.

eBay Inc. and StumbleUpon Inc. have resumed talks for an acquisition once again. I wrote about this matter earlier and underestimated the dollar amount involved. Before I believed that the amount was to be at $40-$45 million, but the Wall Street Journal reported that the amount is expected to be at $75 million.

Nothing is confirmed yet. Everything is just speculation right now.

StumbleUpon started up in 2001 in Calgary, Canada and has a toolbar that allows users to find relevant content based on interests and web surfing habits. StumbleUpon was founded by three people and was funded by Ram Shriram and Mitch Kapor.

StumbleUpon badges can be found on popular blogs and news websites including Pulse 2.0. StumbleUpon also acts as a social network that suggests friends. On April 19, StumbleUpon unleashed a feature called StumbleThru that allows users to allows users to find recommended content from particular domains such as Wikipedia, Flickr, and MySpace. The StumbleThru feature was announced on the StumbleUpon blog.

StumbleUpon announced that they crossed 2 million users in March. TechCrunch broke the initial acquisition possibility.

Jeff King, Senior Director of eBay’s Finding division announced a few days ago that the company will be drastically improving its search engine.  Before making the changes, eBay received constructive feedback, researched, ran through the software development life cycle, and then finally tested the software.  One percent of eBay buyers will notice the change over the next few weeks.

How has it improved?  An example that King gave is that “if a buyer in the test searches for “red size 12 shoes,” instead of looking just for listings with the words ‘red,’ ’size,’ ‘12,’ and ’shoes,’ the search engine will find all of the items in the shoe category that are size 12 in the color red. In the end, the buyer should see more relevant items.”

This project is an improved version of “New Way to Shop,” a feature that eBay introduced in 2005.  As feedback is collected over the next 6 weeks, changes may be implemented.
[Information Source: eBay General Announcements]

Yesterday, TicketMaster announced that they will be suing eBay Inc. and StubHub, a property owned by eBay over interference of contractual rights.  Ticketmaster is owned by IAC/InterActiveCorp. 

eBay had acquired StubHub on January 10 for $310 million and last month, TicketsNow another company with a similar service-line raised $34 million in funding. 

The lawsuit was filed at the Los Angeles County Superior Court and the case focuses on a specific music tour.  The lawsuit filed by Ticketmaster implies Ticketmaster does not approve of the secondary ticketing market.

[Information Source: Wall Street Journal]

 
Greylock Partners announced today that they would be investing $4 million in New York City based company, Payoneer.  Payoneer is a company that allows companies and business partners to pay each other via MasterCard online.  Payoneer is a private company that markets and manages prepaid MasterCard cards and works with the Royal Bank of Scotland and the First Bank of Delaware to process card transactions.

Upon realizing the importance of developing strong partnerships with Web 2.0 companies, Payoneer currently works with selected business allies such as Metacafe, Amie St., oDesk, and BitWine.  Using such a service could also be very beneficial for Web 2.0 start-ups with only a few employees that share office expenses.

“The Internet payout space may well become a killer application in the next few years as Internet companies transition to smarter ways to pay out their partners around the globe,” stated Moshe Mor, a partner at Greylock Partners. “Payoneer’s team has deep payments experience, and an already impressive track rate of customer adoption and solutions. We’re delighted to work in partnership with Payoneer to fuel the company’s expanded market presence.” 

“Web-driven businesses have the unique opportunity to use payments as a retention tool, not just a cost line-item,” stated Yuval Tal, the CEO and founder of Payoneer. “With our additional funding on board, we’ll be adding to our team, expanding our service offerings, and working aggressively to win new accounts during this exciting high-growth time in our market.” 

Payoneer was founded in 2005 and maintains a research and development facility in Tel Aviv, Israel.   The co-branded MasterCards provided by Payoneer can be used anywhere whether it is in any store, online, or ATMs that MasterCards are accepted.

Proven Model Cases:
Citigroup Inc./eCount Inc.
“The prepaid card market is experiencing high growth, and is currently estimated at more than $2 trillion worldwide, as corporations and consumers continue to move from paper checks to electronic-based payment methods” states a Citibank press release announcement of the fairly recent eCount Inc. acquisition.

eBay Inc./PayPal
Another proven model is the legendary $1.5 billion acquisition of PayPal.  In July 2002 eBay acquired PayPal for $1.5 billion in stock.  PayPal now has 114 million customers as of October 2006 over 103 markets and 17 different currencies.

It is expected that with this round of funding that Payoneer will become hypercompetitive amongst some of the major aforementioned players out there.  I have no doubt in my mind that we’ll start seeing the Payoneer logo quite a bit more as we shop online.

[Information Source: E-mail from PR Representative for Greylock Partners]

Today, eBay (NASDAQ: EBAY) has confirmed their acquisition of StubHub in a press release.  Earlier today, I wrote about how eBay could make the announcement as early as tomorrow, but eBay clearly wanted to announce it sooner.  eBay is going to buy StubHub for $285 million + $25 million (in StubHub books). 

“StubHub has been extremely successful in the online tickets segment, and it’s a perfect complement to eBay’s tickets business,” stated Bill Cobb the president of eBay North America Marketplaces. “Together we can strengthen both businesses and provide fans with more choice and better service.”

The acquisiton is expected to be fully completed by the end of the first quarter in 2007.  Whether eBay will keep StubHub independent or not is still yet to be known. 

San Jose, CA based eBay Inc., the online auction/shopping website created by Pierre Omidyar are getting close to acquiring StubHub for over $300 million. StubHub is one of the largest online ticket-sellers for concerts and sporting events. Last year, StubHub sold over $400 million worth of tickets. StubHub made $10 million EBIT last year.

Although the deal has not been officially confirmed by eBay representatives, people familiar with the matter reported the acquisition possibility to the Wall Street Journal. The acquisition announcement could happen as early as tomorrow.

eBay competes directly with StubHub for ticket-selling. eBay has been acquiring companies left and right for the past few years. eBay acquired Sweden-based online auction company Tradera for $48 million in April 2006. Also last April, eBay acquired social networking website, Meetup for $2 million. Two of eBay’s most well-known acquisitions was Skype for $2.6 billion and PayPal for $1.5 billion in 2002.

Mpire, a website that focuses on providing products that offers an insight of trends that are being set online has recently launched eBay Pop which is currently in Beta. “eBay Pop is a beta site that captures some of the buying buzz, popular trends and fun things happening on eBay [source].”

Here is a screenshot of the Movers & Shakers section of the website:

As you may be able to tell, you can filter the movers and shakers by the different topics that are listed in the orange portion which include Fashion, Tech Gadgets, Seasonal, Sports, DVDs/CDs, Toys, and Vintage Cool.

eBay Pop also features a Headlines section that contains relevant news that may set trends. For example, currently on the homepage, there is an article about the “Ugly Troll Dolls Making a Comeback.” The site also contains articles written by eBay Pop staff, Head-to-Head voting polls, games including guessing how much an item is worth, a featured hot item (which is currently Elmo TMX, the 10th anniversary edition of Tickle-Me-Elmo selling for an average of $108.13), a community section that contains blogs and wikis, and lastly a quick description of what celebrity-related products are selling quickly such as Beatles t-shirts.

Mpire was created by Dave Cotter and Greg Harrison. The current CEO of Mpire is Matt Hulett, a former President for the corporate travel division of Expedia Inc. Hulett was also a founder partner of AtomFilms and was also the President of Atom Entertainment, a company bought by Viacom for $200 million and was backed by Macromedia and Sequoia Capital.

Paypal, the online payment application for eBay Inc. (NASDAQ:EBAY), has massively expanded to other markets globally. PayPal now supports online transactions with 10 new currencies. Now PayPal customers can use the service in 17 different currencies and in 103 new markets. These countries include the Philippines, Indonesia, and Vietnam.

“International expansion is a key part of PayPal’s growth strategy, and we are thrilled to expand our services to 103 markets and support 17 currencies worldwide” stated Senior VP of PayPal, Dana Stadler in a press release. “With these new offerings, PayPal continues to make domestic and cross-border trading easier and more convenient for its millions of customers around the globe.”

PayPal has added the following 10 currencies:

• Hong Kong Dollar,
• Danish Krone,
• Hungarian Forint,
• Czech Koruna,
• New Zealand Dollar
• Norwegian Krone,
• Polish Zloty,
• Singapore Dollar,
• Swedish Krona, and
• the Swiss Franc

These currencies are added on to the currently supported currencies: The US Dollar, Euros, Pounds, the Canadian Dollar, the Japanese Yen, the Australian Dollar, and Chinese RMB.

PayPal currently boasts 114 million customers and with these new currencies, the company will undoubtedly grow a lot more. Speaking of PayPal, how bout’ dem PayPal alumni?!

The CEO of Sonific, Gerd Leonhard has brought to my attention that a new feature has been introduced with Sonific’s product, SongSpots(TM). Users of SongSpots(TM) can now kick up the level of entertainment a notch in their eBay product listings by embedding SongSpots(TM) supported music.

How you ask? For a detailed explanation, I’ll refer to Leonhard’s blog:

1) Register with Sonific (yes, it’s free, easy, and instant)
2) Pick any song from our approx 40,000 artists and click on ‘USE’ (yes… we are adding new ones all the time). Use our Find SongSpots search to get to the cool stuff quickly (try the Featured Artists which are listed in each genre).
3) On the next page, name your songspot, provide the EXACT location where the songspot will be (you may have to come back and re-do this later since ebay generates that URL only after you post your auction), and pick EBAY from the drop down menu. Then hit the ‘activate’ button.
4) Copy the code on the bottom of the page (one click does it), and drop it into the Item Description box of your auction post (see below) Note that the Sonific SongSpot code must be unaltered and needs to go exactly in this box (not somewhere else).

5) Preview your auction — it should look something like this

6) Submit - and voila, your sonified auction!

Other features of Sonific’s products include the ability to purchase music in “just a few clicks” which was enhanced by a partnership between Sonific and UK-based music download site, Wippit.