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Technology Stocks : eBay - Superb Internet Business Model
EBAY 82.49-0.3%Nov 26 3:59 PM EST
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To: Bill Harmond who wrote (4292)7/27/1999 2:09:00 AM
From: Doug Fowler  Read Replies (3) of 7772
 
Here is another TROUBLESOME aspect of this report.

Total transaction volume on eBay increased only 15 percent over the previous quarter. And THAT number includes any successful completions in the outage time frame.

The number of auctions listed was up 28 percent over the previous quarter.

This means that eBay was MUCH LESS EFFECTIVE for sellers than it was the previous quarter. (Listings up 28 percent, but results only up 15 percent.)

The complaints from many sellers that their auctions were performing poorly is anecdotal -- but the eBay report confirms that these complaints were in fact WELL FOUNDED.

Less success for sellers means they start to look elsewhere, listing fewer items on eBay.

It would appear that the 29M auctions for eBay last quarter was too much supply and not enough demand. So, either sellers have to settle for less, or cut back on the number of auctions they list. Neither of which is good for eBay (although eBay would prefer the former, since two-thirds of their revenues come from listing fees).

Geez, I was already disappointed with the auction count slowdown in growth, but the indication is that the supply is already too high compared to the demand.

This bodes very poorly for auction count growth (and hence revenues) this current quarter, because as we all know, supply ultimately has to meet demand.
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