eBay and Amazon's First Quarter Reports

Last week, both eBay and Amazon released their first quarter reports. The results were not at all surprising.

EBay posted that its first quarter 2009 revenue decreased 18% year-over-year. From eBay's press release:

The ecommerce company posted first quarter revenue of $2.02 billion, a $171.6 million year-over-year decrease caused primarily by the impact of the stronger dollar and the decline of the core Marketplaces business in difficult macroeconomic conditions. PayPal, Classifieds and Skype performed well, delivering year-over-year revenue growth.

Notice that eBay blamed "difficult macroeconomic conditions" and "the impact of the stronger dollar." While I can see how the economy might possibly be a factor, the stronger dollar excuse makes little sense to me. Ina Steiner's blog mentioned that "approximately 54% of Marketplaces revenue came from markets outside of the U.S." I assume that this is the reason that eBay claimed that the stronger dollar reduced revenue. People from outside the U.S. buy less from inside the U.S. when the dollar is stronger. International markets decline when the dollar is stronger. I am quite skeptical of this since 54% out of the U.S. versus 46% inside the U.S. is not that big of a difference.

When Amazon released its results the day after eBay, it proved that eBay told fibs to hide its further decline. According to Ina Steiner, Amazon's net sales "increased 18% to $4.89 billion in the first quarter year-over-year, and net income increased 24% to $177 million. Worldwide unit growth was 30%. Active customer count exceeded 91 million, up 16%. Worldwide active seller accounts were more than 1.6 million, up 19%."

Consider that Amazon has international sites just like eBay and that Amazon also has international customers. How is it that the strong dollar is not causing Amazon's earnings to decline? How is it that eBay is plagued by "the impact of the stronger dollar" and "difficult macroeconomic conditions" while neither the dollar nor the economy are affecting Amazon at all? It seems to me that eBay's problems are unique to eBay. We all know that eBay is to blame for its own problems, and it is truly sad that what was the number one place to find unique collectible items is self-destructing.

What is even more pathetic is that after eBay announced its decline in revenue due to bogus reasons, eBay stock went up and several articles were posted by enlightened analysts that praised eBay. How can eBay's Board of Directors and these analysts be so clueless?

.......................................................

This is something that I decided to tack onto the end of this post. For whatever reason, I have eBay's home page as my home page on Google Chrome rather than eBay's search page, which is what I have always used as my home page on Firefox and Internet Explorer. EBay uses its home page to try to sell me stuff, and I am continually amazed at how off the mark the results are.

I bought some Grace Harlowe books a week ago. Even though I have bought other books since that time, eBay is fixated on trying to sell me Grace Harlowe books, or what eBay thinks are Grace Harlowe books. Actually, I don't know what eBay is trying to do. Here is what I have seen on eBay's home page on different days this week:

What?! These books have nothing to do with Grace Harlowe or anything I have ever bought in my entire life! Each day I see a different selection of "Grace Harlowe" stuff that is totally unrelated to Grace Harlowe and series books. Give it up! At least when eBay tries to sell me Nancy Drew books, they usually pick Nancy Drew books. Of course in the case of Nancy Drew, they still miss the mark by a mile.

What is also important about this is that eBay is only picking Buy It Now Items, which is probably why the results are so screwed up. Auctions are more expensive, yet eBay does nothing to promote them. This is why I am listing on Bonanzle, where I feel like I have a chance at selling books without having to pay huge prices for little exposure.