Bank of eBay? Is This Where eBay Is Really Heading?

August 22, 2008 · Filed Under Internet Marketing, News, amazon, eBay, paypal · 1 Comment 

The Bank of eBay?

I have been talking and writing for months (OK, years) about the changes at eBay. It has been a long and winding road we have taken to get to this point in our ecommerce journey. While I thought the road was leading to a retail experience on eBay, an article today on the ABC News Money website by Michael S. Malone makes a tremendous amount of cents (OK sense).

eBay Numbers Remain Flat

By reading the financials and watching where the money is really coming from over the past couple of years one can justify the article. While the numbers for eBay have slowed significantly according to the latest financials, PayPal’s Merchant Services is growing at a phenominal rate of nearly 60% Y/Y according to Seeking Alpha. According to eBay’s own Q2 Financial Statement the growth rate of the eBay MarketPlaces was said to be 13% overall. This includes eBay, StubHub, Kijiiji, Shopping.com and other ecommerce sites. But, the PayPal growth is reported to be 33% Y/Y.

The new user growth on the eBay site has gone flat and eBay is more and more moving to a retail online expeprience. As this move will put it more in line with it’s major competiton Amazon, the real move that many people may not be noticing is into the ecommerce payment arena.

Money Makes Sense

Watching the money trail makes perfect sense. With over a 20 point difference in income growth between the MarketPlaces and Payment Systems and the room for growth in the ecommerce payment handling it makes me stop and take notice. Nearly every week I receive emails notifiying me of another company, airline or ecommerce site now accepting PayPal. Given the economy of today, ecommerce sites are fighting for every buying customer they can. These sites will do anything to make online purchasing easy for their customers and PayPal is in the catbird seat due to it’s position as the largest online payment system in the world.

Recent eBay Changes

While many including myself have focused mainly on the impact of the recently announced changes on sellers on eBay, could it be that this is just exactly what eBay wants us to focus on, and not the fact that PayPal is really the money maker and all the rest is just smoke and mirrors?

 

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