Even eBay hurting in this ecomony

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If eBay is feeling hurt by the economy, then you know it must be bad.

For the first time in 10 years, sales dropped at the San Jose, Calif., company, according to a story in the New York Times, with revenue dropping 7% to $2.04 billion. It's Marketplaces unit, which includes the core eBay auction site, reported a 16% decline in revenue.

It reported that its profit fell 31%. Ouch.

The Times reported that the online marketplace company made considerable efforts last year to reduce its dependence on its auction business, where growth has slowed in favor of fixed-price sales.

I guess bidding can be fun, but I never understood how eBay, or any other company, can make much money from auctions. As a shopper, I want a fixed price that is fair. If I don't like the price, I'll go somewhere else. If I want to haggle, I'll go to a flea market.

Maybe as part of that theory, gross merchandise volume, the total of all transactions on the eBay Marketplace, dropped 12% during the quarter, its second consecutive quarter of decline. If shoppers aren't getting tired of eBay, then they must have less money to spend shopping online. When the economy turns around, I'll bet eBay will be the first place people go to buy a new watch to celebrate.


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