August 24, 2007 2:33 PM PDT

eBay surfers get an Amazon splash

If imitation is the sincerest form of flattery, should look with pride at the changes going on at eBay.

The Web's largest auctioneer is revamping page designs, overhauling search functions and launching new services that bear a strong resemblance to features that work well at Amazon, the Internet's biggest retailer. To be sure, this is no casual face-lift for eBay.

For more than 10 years, eBay, with its fat margins and zealous user base, has been the dominant force in the battle between the two e-commerce superpowers. Currently, however, the momentum appears to be with Amazon.

Wall Street has rewarded Amazon for its ease of use, growing selection, low prices and success at persuading greater numbers of merchants to sell goods on its site. By comparison, some say eBay looks frumpy, with its helter-skelter search results and cluttered product pages. Sure, eBay has seen sharp growth from two significant units--payment service PayPal and Internet telephone service Skype--but investors are showing signs of wariness that Amazon may be eating into eBay's market share.

Images: eBay tries out new features

"E-commerce is growing at 20 percent," said Scot Wingo, CEO of ChannelAdvisor, which sells e-commerce software tools to small and medium-size businesses. "Amazon is growing at 30 percent. What everyone wants to know is why eBay is failing to keep pace with e-commerce?"

Here are the metrics that disturb most eBay watchers. Growth in gross merchandise volume (GMV), a marquee metric in measuring eBay's health, is slowing, while listings are in decline. For the quarter that ended June 30, eBay reported worldwide listings fell 6 percent and GMV grew 12 percent to $14.46 billion, compared with growth of 18 percent in the same period a year earlier.

The company has tried to explain that listings no longer have the same relevance as the company has diversified.

"What we said about the second quarter was that we were really pleased with our growth," said Hani Durzy, eBay's spokesman. "The second quarter was a good one."

The company saw profits for that quarter shoot up 50 percent to $375 million, and revenue increased 30 percent. Nonetheless, eBay's message has been met with mostly skepticism.

Amazon's shares as of Friday afternoon were trading at around $78, while eBay was at around $34. Since March, Amazon's share price has risen 50 percent, while eBay's has risen 13 percent. Wall Street is convinced that the buying experience at eBay is broken, and the message to CEO Meg Whitman is clear: fix the bread-and-butter part of your business.

And that's likely why visitors to eBay have seen a new, less-cluttered home page recently and a service that allows buyers to bid on several items at the same time. Another feature lets consumers track eBay auctions while logged in at other Web sites.

Meanwhile, eBay's engineers continue to tinker. The company has quietly tested new product pages, search features and product displays with a look and feel that is unmistakably Amazon.

For example, eBay is experimenting with a new, smarter search. Key the words "Nikon D40" into eBay's traditional search, for instance, and the results page shows an 18-55mm lens at the top, followed by three cameras, another lens, a reversing ring for the lens and later a camera bag.

But earlier this week, a search for the Nikon D40 returned a page with two photos of different models of the camera. (The search pages aren't showing currently, since they're only now being tested.) The pictures were much larger than the thumbnails typically found in eBay's results. Below the photos were ratings of the cameras, links to customer reviews, and the range of prices.

Wingo said that eBay's search retrieves scads of items that are only peripherally related to a product, and that the company is working on narrowing its searches.

Someone entering "Nikon D40" into a search field is likely looking for the camera and not a lens cap, according to Wingo.

"They are trying to parse their findings," Wingo said. "When someone punches in 'Nike, blue, size 10,' the search will know that Nike is a brand, blue is a color and 10 is a size. This will lead to a much cleaner result."

Product pages could see big changes. Soon, eBay will offer customers photos to enable them to see a product from multiple angles, something it does not do now.

Further down the page are tabs labeled Overview, Listings, Reviews--similar to what Amazon shows on a Nikon search: a single large photo is posted to the page and underneath are images of the camera from different angles.

This is followed by technical and product details and descriptions, as well as a listing of products that other customers have bought after purchasing the camera.

"These features have existed on the site, but never in an aggregated or simple way to find," Wingo said. "This is a much more Amazon way of buying."

Sean Ditterle agrees. After reviewing some of eBay's tests, the auditor from San Francisco who looks for deals on eBay about four times a week, welcomed the upgrades.

"The search takes you to where you want to go quicker," said Ditterle, 25.

eBay is after what Amazon has succeeded in doing for years now: SKU authority. SKU stands for stock-keeping unit, a numbered system that retailers have used for decades to keep track of inventory.

Amazon has done a good job of cataloging the goods it sells, Wingo said. But eBay faces a much harder challenge in this regard, according to Durzy.

"The technical challenge that we face to help people find things is we have a much larger offering," Durzy said. "At any given time there are 100 million items on eBay. There are a lot of things that you can't find anywhere else and there's not a catalog or SKUs offered by our customers. The product names are whatever millions of people want to call them."

Durzy denied that eBay used Amazon's design as a model for its redesign. Presumably, investors won't care where eBay got the inspiration. They just want the features to work.

Said Durzy: "The most important thing for us is to focus on improving the buyer experience and increase engagement on the site, encourage return visits and help them find the things they are look for...all this is paramount for us."

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eBay's Touchy Feely Recipe For Failure
eBay got it's start catering to the online fleamarket refugees who dialed in from their trailers for profit and a new social experience. The "touchy feely" Politically Correct mentality, coupled with their arrogance is what's responsible for their archaic UI and ongoing slike into irrelevance.

Want to sell gun parts on eBay? Sorry, momma Left Coast won't let you. Have a negative experience with fraud and can't get anything but a canned form letter answer from eBay's "support" group? Sorry, you can't talk about that in the discussion forums without being sanctioned/suspended.

eBay was a great idea. Many of us pray to god every night that someone like Best Buy, Sears, Google or even Amway comes up with a PC Free and cost-effective alternative that we can switch to.

Although we have bought and sold on eBay since 1998, I would love to see eBay completely self destruct and Meg Whitman wind up in a bread line! I sincerely hope Amazon continues to kick eBay's ASS!
Posted by westrajc (78 comments )
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Amazon and Yahoo
Both really have failed at the attempts at online payments and auctions.
Posted by kieranmullen (1070 comments )
Link Flag
Ebay: Why not raise fees... again!
Ebay customers have seen little value added for the constant increase in fees. Customers are looking elsewhere to sell. Many items on ebay are new items. These can usually be found elsewhere on the internet cheaper than ebay.

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Posted by kieranmullen (1070 comments )
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wonder why? eBay prices are no longer best
I used to use eBay a lot- in the early days it was largley a P2P buy/sell and someone whom needed to get rid of something would give it up for less than what a google search or shop-bot would uncover- for that you had to risk the occassional fruad or 14 year old trying for easy money, but was usually worth it.

Then, the surplus discounters moved in and there were lost of new/wholesale deals, some where good deals, some just wanted outrageous shipping charges or sent 'badly used refurb' with bad return policies. Still found worthwhile stuff.

Now, while you can still find above deals, it seems many or most items are (after shipping) ABOVE Amazon, google search or shop bot pricing, and it is mostly not worth the eBay risk of fraud, bad return policy and other unknowns to buy off eBay. In the past, sometimes a 'real godd deal' was a bit to good to believe but actually worked out or was mildly dissapointing (but still a decent deal), now any 'great deal' seems be too be a cons where they want you to pay by western union and john smith seller is someone in translvania, or the click reveals it is selling "info" on how to get something cheap- right...

Oh, and don't you love the eMail push from eBay- while others can say- come buy this special widget for x dollars and get free shipping, theres are a waste of time basically leading you to browse for one of the above auctions or -buy-it-now that has double/triple the shipping charges of an eTailer.

Bottom Line is that while I occassionally still do some eBay buying, it usually seems better and safer to go to an established 'eTailer' or CraigsList (only sometimes is that Amazon, there are plenty of other ones). (sorry eBay- thanks for starting something but bye, bye unless some of these changes can snag me back for good reason and not just to browse for more of above)
Posted by gmasters (7 comments )
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I sell more stuff on Amazon now.
eBay's fees are too high. I get more money after fees selling my stuff on Amazon. I buy a lot of stuff on eBay but I don't sell there like I used to.
Posted by lingsun (482 comments )
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This is a classic case of a company without serious competition.
eBay has no serious competition. They've been abe to maximize their income based on charging as much as the market will bear, instead of having to compete with anybody.
Posted by lingsun (482 comments )
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eBay's real problem
eBay believes that it understands the real problem behind its decline in market shares, listings, and sales. However, this may not be the case in truth. eBay is addressing many problems that they feel lend support to scams. Unfortunately, they may be addressing symptoms and not actually addressing the problem. Today there are more scammers then ever on eBay. Why is this? eBay, states that they have taken steps to address these problems.

eBay feels by watching the sellers and blocking specific users that are selling items of suspicious origin that they are blocking scam artists. The reality, the way eBay is going about this is wrong. They have managed to block a large portion of legitimate sellers. In doing this eBay has only managed to block a small number or scammers for a little while.

The real issue here is that the scammers always find a new way on to the eBay site. Meanwhile, the legitimate sellers are left in the cold. Legitimate sellers try to follow the letters of eBay law. Sometimes, inadvertently, the seller violate encumber some bindings that eBay has set in place. Without notice, these sellers are blocked; they are not informed of what the specific violation was. In addition, they are not warned about the issue and given a chance to correct it. All said the legitimate sellers are lost, many of them power sellers. The scammers remain on eBay. A larger problem has now replaced the original problem.

Remedy - A good remedy for the problem would be to have suspicious listings removed. The seller would then be notified and given the opportunity to fix it or delete the listing. Next, increase the registration and verification process and tighten the security measures in which people gain access to the accounts. eBay should screen their employees and leaks have been rumored to be initiated from in house on passwords for unused old accounts.

Of course addressing sellers fee on eBay seems to be a trite point. This is the second largest contributor of sellers moving to other sites. eBay continues to push sellers fees, and extra options to a point that margins are slim to none. This would deter any smart business person from selling on a site were there is no realized profit.

Analysis - eBay, needs to find the real issues and address the problem, not the symptoms. eBay, needs to lower fees back to a manageable level; where sellers will sell twice as much and eBay will make much larger profits from gross volume sales and not net income sales. This is a business and eBay should treat it like one. The golden rule applies; do not alienate your customers. eBay seems to be biting the hands that feeds, while allowing the scammers to run free.
Posted by cpushrink1 (4 comments )
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