Goldman live blogging I

May 21, 2008

Marketplaces ChannelAdvisor By ChannelAdvisor

Q: Talk about eBay’s growth prospects
A: (JD) We are blessed to be in three very large markets.

Within ecommerce we have our core business, that has had decelerating growth we aren’t happy with and we’re focused on increasing/addressing.  Our goal is to grow as fast as ecommerce and think we can get back to that.

Also have non-gmv businesses: shopping.com, etc.

Online payments is a big opp, growth on eBay is big opp, only 50-60% penetrated

Lastly online communications -Skype grew at greater than 100% y/y. Focus for 2008 is reinvigorating ebay core growth.

Q: How do you see Skype integrating with paypal/ebay?
A: Skype is a great standalone business

Anyone have peer to peer video on skype (2 hands -one jeff jordan)

Bob Swan
-let’s talk about margins, we talked about long-term margins in the 35% range, with Skype in the mid 20s.

Marketplace margins are at 40%, paypal is 50%, Skype is 11% margins.

Recently Paypal has gone down,

Q: In AU you are making Paypal required, can you discuss the response to that and are you doing it in other markets?
A: This was driven by our key 2008 focuses:
1. Make ebay easier to use
2. Make it safer

Paypal achieves the safety piece and they will give a blanket guarantee to buyers that they can’t do elsewhere.

We’ll take the learnings and applying them to other markets.  You’ll probably ask if we’ll require paypal only.  We don’t have any plans to do that.

Q: Can you talk about improvements to search?
A: We are changing the search metaphor on eBay.  It was time ending soonest.  In a day and age when 40% of our GMV is fixed-price and we have the unique asset of closed-transaction data that can be used to make search better, we started collecting data and are moving towards  moving the search on eBay to BestMatch.  We factor in quality of seller, relevence and timing.  Italy was one of the first places we did this and we’re doing some things to try a better fixed/auction hybrid model.

Q: What are you doing to accelerate eBay?
A: (JD) We are driving more changes than ever.  There are no silver bullets, we’re testing in different geos, when we find things that work, we’ll do more of them and less of the ones that don’t.

Q: In Korea we’ve seen lots of couponing.  How do you feel about issuing them in the US?
A: The Korean market has been a great success study for us as we faced tough competition and had to make lots of changes.  Now we’re at 35% y/y growth.  In the rest of eBay we have both fixed-price and auction.  We’re focused more on customer loyalty.  With 84m active users, we think there is lots of growth in retention and share of wallet.  We are trying a variety of loyalty-based initiatives.  Couponing is one of them.  Jenn (Jennifer Watson), let’s say you usually buy 6 times a year on eBay and we see you decrease activity we would send you a coupon saying – here’s $20 come back.

Expanding more in Q2 – but a very small part of volume.

Swan: It’s not a new cost, it’s a better/redirected marketing spend for us. (contra revenue)