Kevin Kelleher presents an interesting theory on how eBay stopped being recession-proof.
Seeking to increase sales, eBay initiated changes earlier this year that made it a safer and more orderly place for people to buy products online. In doing so, however, eBay may have made itself more vulnerable to the effects of the current recession.
During the recession of 2002, eBay stock performed exceedingly well against the Nasdaq. But the numbers are reversed during this current recession. In fact, statistics indicate that while online traffic generally went up during the first week of December, eBay’s traffic tumbled 9%.
Kelleher speculates that eBay’s recent strategy shift may have taken itself out of the “small pond” of online auctions where it was the “big fish,” and transplanted itself as yet another competitor it in the more cutthroat market of online retail.
Should eBay have stayed focused on auctions? Tell us what you think.