Analyst Downgrades eBay Citing Numerous Concerns

[Steiner]

Analyst Downgrades eBay Citing Numerous Concerns

Sandeep Aggarwal, Senior Internet Research Analyst at Collins Stewart LLC, downgraded eBay to a Sell. You can read the full report on the company's website (note that it is a PDF file).

Aggarwal believes eBay's ................ Marketplaces "continues to suffer from structural problems causing market share loss and gross margin pressure and is far from rebounding. In addition, we are incrementally more negative about deteriorating trends at Shopping.com, gross margin pressure in Payments, and lack of promotional-infused boost in Q1. We are cutting our est. to reflect our increasing concerns on the downside risk to eBay's earnings." eBay is due to report first quarter earnings on April 22, 2009.

I found this comment particularly interesting: "In our view, eBay was very aggressive in promotional activities during Q4-08 including participation in Live Search Cashback, which temporarily boosted eBay's top-line (and affected margin). In our view, Q1-09 will not give eBay that level of boost."

Microsoft was giving eBay shoppers cash if they used its search engine to shop on eBay. While the promotion is still on-going, it doesn't seem to be a sustainable strategy long term. eBay's decision to partner with Microsoft may have provided short-term benefits, but I continue to hear from merchants concerned about their listings not showing up on Google the way they used to. Hopefully analysts will ask eBay about its relationship with Google and the ways it plans to drive traffic to the site at the upcoming conference.
 

[kami]

Well that's why Pennsylvania Treasury Raises $2.6 Million on eBay

The Pennsylvania Treasury Department's continuous eBay auction for unclaimed property has added baseball memorabilia listings in celebration of baseball's opening day. Items up for bid include collectible baseball cards featuring Roberto Clemente, Mickey Mantle and Yogi Berra.

The program also helps people find unclaimed property. In 2008, the Pennsylvania Treasury Department reunited nearly 58,000 owners with their unclaimed property, totaling more than $86 million. Treasury is currently seeking the owners of over $1.5 billion in unclaimed property.

Each year, Treasury receives millions of dollars in unclaimed property from abandoned bank accounts, forgotten stocks, checks that have not been cashed, certificates of deposit, life insurance policies, safe deposit boxes, hospitals, nursing homes, and other sources. The tangible property items, such as jewelry, collectible coins, and medals, are kept in Treasury's vault. If attempts to locate the owner prove futile, the items are appraised and then auctioned on eBay. The proceeds of the auction are maintained for the owner to claim.

According to the agency, Pennsylvania is the only state to have a continuous eBay unclaimed property auction and has raised over $2.6 million.