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eBay Profits Suprisingly Down 31%

Gordon Kelly


eBay Profits Suprisingly Down 31%

Hopefully we're getting to the last of these...

Proving just what financial freaks the Apple Q2 and Google Q4 results were eBay has continued the theme of everyone else and posted rubbish figures for its latest quarter.

Q4 Revenue? Down seven per cent on the same period last year to $2.04bn. Profit? Down a huge 31 per cent to $367m. Even web traffic: down four per cent on last year, despite the increasing number of people regularly going online around the world. The web's most visited retail site also announced it laid off 1,600 staff during Q4, approximately one in ten of its global workforce.

Against this the eBay owned PayPal and Skype businesses saw 11 per cent and 26 per cent rises in revenue to $623m and $145m respectively to help restrict the damage. It also mean over the full year the eBay group posted a net profit of $1.78bn which was actually a slight increase on 2007 which totalled $1.738bn (though it was officially just $348m due to a goodwill amortisation worth $1.39bn).

"While the holiday season was tough and competitive, our overall results for 2008 were strong," said eBay CEO John Donahoe at his most plucky in a statement. "We will build on our strengths in 2009 while managing our business prudently in the continued challenging environment."

Now you'd think during such strained economic times that a site like eBay would boom with everyone looking to monetise their second hand possessions and grab some bargains but it's clear in a "continued challenging environment' we aren't that smart things don't work like that... yay. Aren't recessions fun!


Official Statement (PDF warning)


January 26, 2009, 12:36 pm

Not surprised at all!!

Maybe it has something to do with eBay shafting sellers nowadays and always siding with the buyer regardless. I have 976 100% positive feedback and recently sold an item for &#163211. Buyer paid yada yada and left good feedback. 6 weeks later the buyer emails me to say the item has broken and she wants a refund. Because of the way she described the problem its obvious she broke it so I refused so instead she complained to eBay and PayPal just refunded her the money, no questions asked! So I'm down 1 item, &#163211 and no recourse. Not used eBay since.

Geoff Richards

January 26, 2009, 12:52 pm

Sorry to hear that, AndyR. I'd heard rumours of such nightmares and been warned by friends that it could happen. I kinda dismissed it in my mind but if it can happen just like that, to someone with your record, with NO consultation, then that's a worry.

Who do you use instead these days?


January 26, 2009, 3:21 pm

AndyR, yeah that's not right. My mum is a powerseller on Ebay, and the sort of tricks some buyers do is paramount to stealing. The biggest problem I have with Ebay, in most circumstances some of the second hand stuff ends up going for more than you could have bought brand new, loads of people seem to get caught up in the bidding war. I also think Ebay just became a bit of a Fad, and now maybe the excitement has faded.


January 26, 2009, 3:38 pm


Don't use eBay at all now, instead I just sell what I need to sell via Amazon Marketplace, Play Trade or direct on forums I use. I never believed it at all until similar things happened to some friends, then when it happened to me I gave up.


January 26, 2009, 3:39 pm

Not surprised at all. eBay is no longer the cheapest place to buy goods especially brand new items. Many electronics and PC stuff cost more on eBay than other online retailers. Perhaps the time has come for traders to start competing and stop taking advantage of unsuspecting buyers.

b o d

January 26, 2009, 3:41 pm

They still shaft buyers too, although I do hear the sellers get hit more often. I bought an item which was dispatched from an international location, even though the it claimed to be dispatched from the uk. I was hit for customs fees and then parcel force managed to deliver it to the wrong address. The seller had no interest in following up my queries even though I was able to show proof it hadn't been delivered to myself. I raised a claim which went to paypal. They found in favour of the seller as the seller was able to prove the item had been sent, even though there buyer protection mentions you can claim if you haven't received an item. I was unable to make a claim with parcel force as they will only deal with the sender. The seller had no interest in following this up with parcel force. I lost &#163400 and the only option would have been to go to court, which isn't something I wanted to do. Instead I'll just never use ebay or paypal again.


January 26, 2009, 4:43 pm

Agreed PayPal is just as bad. My wife had here account funds "held" for 28 days recently, just over &#163150, for "verification checks". Strange as she has been with them for 5+ years. Its just so they can scam interest from you I think, so again like eBay, we both closed our accounts.

Jon 2

January 26, 2009, 5:12 pm

I started on Ebay in 2002, then it was about buying second hand goods off private individuals. Now it seems its more and more about businesses and less about private sellers.

Also the fees are becoming more and more expense and difficult to understand and now it seems compulsory to use paypal which only doubles the cost, and I wonder why that is???

Greed is ruining what was once a good idea.


January 26, 2009, 6:25 pm

AndyR, did you contact eBay/PayPal about this? It seems strange that they employ such practices without taking it up with the seller first, or even requesting that the buyer ship the damaged item back to the seller; is it stated in the T&Cs that they are within their right to to this? Someone wouldn't be able to return a damaged item so long after the purchase date to a shop, so why should they be given an instant refund just because they bought it online from a private seller?

I only know a few people that have sold a couple of things on eBay, but not heard any problems like this. It seems like there is a fundamental flaw in the way they handle complaints about sellers. I'm surprised that there aren't more people out there trying to take advantage of this and get something for nothing, although from what people have said maybe there are a lot of people that do this. Which raises the question is so many people have been ripped off, why haven't they done anything about it, because to me it seems they are employing borderline illegal practices if people are gaining ownership of something they haven't paid for. But then again, I would have thought most of the legislation is only concerned with consumer protection, not those selling the goods, but IANAL.

I also use Amazon Marketplace and PlayTrade which offer a good service and have a different complaints procedure. I never felt comfortable using PayPal, it just didn't seem very secure, and I've tried to avoid eBay like a bad smell, it just looked like a breeding ground for con artists and the like.


January 26, 2009, 7:30 pm

@Jon, Greed is ruining what was once a good idea

Yeah, it's called shareholders. Happens all the time, I remember a very popular property website for selling houses (won't mention the name), you was once allowed to sell privately, but no more.. :(

And yes the fees, well they are daylight robbery. For the price, my mother could have her own Dedicated server with a payment gateway and still be paying less.

So I'm pleased as punch that profits are down 31%, take that you shareholding greed machine.


January 27, 2009, 12:43 am

i used to use ebay. I sold a brand new laptop on there for &#1631200 through paypal. Again user left good feedback. 7 Days later i got an email from the user saying the screen had broken on its own. I asked him to send me an email with pictures. The screen was cracked from top to bottom, with a hole in the middle. Looked like a pen had been left on the keyboard, and the laptop closed, which resulted in the screen shattering. I refused to refund the money. The user raised a complaint saying it had only worked for 7 days. I forwarded the pictures she had sent me of the screen. The user told ebay it was like that when she got it even though she had left feedback saying "good fast laptop excellent++++++". Ebay refunded the money and said i could not prove she didnt recieve it like that. Again i dont use ebay or paypal any more!!!!


January 27, 2009, 12:45 am

forgot to say that my feedback score was 911, with 1 negative feedback since i started using in 2003


January 27, 2009, 2:46 am

I stopped using eBay because it's just turned into another commercial store front - but one with two levels of indirection and between you and the supplier. All the small-volume/interesting sellers have moved on, put off by the ever higher fees, non-existent protection and lack of any sort of customer service.

When you then add PayPal's desire to hold onto your money for arbitrary lengths of time "for your protection", and eBay pushing PayPal into every sale "for your protection" again, then it just isn't worth the hassle.


January 27, 2009, 10:55 am

I have been a buyer on eBay since 2000 and have spent at least $50,000 over the years. I have bought close to 1500 items but with all the changes that CEO Donahoe has made I no longer enjoy shopping on eBay, most of the good sellers who had interesting item for sale are gone. eBay is trying to become a big fixed priced store but if I was interested in that I would go to Wallmart. I am not surpised that earnings are down. With the new My eBay page which works terrible and the total lack of leadership at the company. With the economy like it is eBay should be doing great. Instead it's not and they try and blame it on " an almost unprecedented external enviroment" that sounds like someone with a MBA that doesn't have a clue and wants to blame it on something else than themselves. eBays problems are all internal and start right at the top.


January 27, 2009, 11:24 am

@all - fair play guys. When I said 'surprisingly' it was in reference to the fact I would have expected more second hand selling and purchasing during these difficult economic times but truth be told I think you all have a point. I agree eBay has lost its connection with the casual seller/buyer and been swamped not only with professional companies and fixed price listings but also fraud which is does nowhere near enough to combat.

I stand corrected.


January 29, 2009, 3:28 am

Wow... well I actually like eBay. I once lost &#1633 there (out of &#1632,000 spending). I think Gordon's article just prompted those with unfortunate experiences to comment.

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