The Ebay Rag Mag

October 6, 2008

EBay Cuts Jobs, Buys Bill Me Later

Filed under: News & Gossip — ebaygossip @ 3:06 pm
Tags: , , , ,

AP: Online auction site eBay says that it will reduce its work force by 10 percent which will affect about 1,000 jobs. EBay, which has been struggling to attract new users, also announced that it will buy three online companies, including payments business Bill Me Later.

SAN JOSE, Calif. (Oct. 6) – EBay Inc., which still reaps big profits but has been struggling to attract new users, said Monday it will cut about 1,000 jobs in an attempt to streamline its business. The cuts amount to 10 percent of eBay’s work force.

The online auction site also plans to get rid of several hundred temporary workers and reduce open positions. EBay Chief Executive John Donahoe said in a conference call the company is “creating efficiency” in areas that require it.

The company expects restructuring charges of about $70 million to $80 million as a result of the cuts, mostly in the fourth quarter. EBay said the reductions will lead to $150 million in annual cost savings.
The latest round of cuts follows eBay’s announcement earlier this year that it was cutting 125 jobs in Europe and North America, including 70 posts at its headquarters in San Jose, Calif.
Donahoe said Monday the weak economy and the effects of the strengthening dollar are “affecting our businesses.” Nonetheless, eBay said its third-quarter earnings would be higher than it predicted in July – though revenue will be at the low end of its expectation. The company is scheduled to report third-quarter results on Oct. 15.
EBay shares were down $1.19, 6.3 percent, at $17.75 in morning trading.
EBay also said Monday it will buy online payments business Bill Me Later for $820 million in cash and $125 million in outstanding options. The company also said it will buy Danish classifieds site dba.dk and vehicles site bilbasen.dk for $390 million in cash.
Bill Me Later allows online retailers to offer shoppers credit. EBay said Bill Me Later has “sophisticated underwriting techniques” and tells shoppers within seconds if they’re approved for credit, without detailed application forms. Bill Me Later will become part of PayPal, the online payment service eBay bought in 2002.
Copyright 2008 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
2008-10-06 08:12:22

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eBay Announce Reductions, Cuts and Downsizing

Filed under: News & Gossip — ebaygossip @ 3:01 pm
Tags: , , ,
 
blukentucky  (14528 ) View Listings | Report  
eBay Inc. Buys Leading Payments and Classifieds Businesses,marketwatch: http://tinyurl.com/4kdlkbStreamlines Existing Organization To Improve GrowthLast update: 7:45 a.m. EDT Oct. 6, 2008SAN JOSE, Calif., Oct 06, 2008 (BUSINESS WIRE) — eBay Inc. (EBAY:EBAY, , ) today announced two acquisitions that significantly extend the company’s leadership position in online payments and classifieds.In payments, the company is acquiring the U.S.-based online payments business Bill Me Later(R) for approximately $820 million in cash and approximately $125 million in outstanding options.

In classifieds, the company has acquired Denmark’s leading online classifieds site dba.dk and vehicles site bilbasen.dk for approximately $390 million in cash.

The company also announced plans to reduce its global workforce by approximately 10 percent,

affecting about 1,000 employees in addition to several hundred temporary workers and the reduction of open positions.

The global reduction is intended to simplify and streamline eBay’s organization, improve the company’s cost structure and strengthen the overall competitiveness of the company’s existing businesses.

The reduction is expected to result in pretax restructuring charges of approximately $70 million to $80 million, with the charges predominantly recorded in the fourth quarter of 2008.

“We are making aggressive moves to strengthen our leadership positions in e-commerce and payments to competitively position our company for long-term growth,”

said John Donahoe, eBay Inc.’s president and chief executive officer.

“Bill Me Later is a perfect complement to our portfolio, a company that belongs with PayPal.

Together, PayPal and Bill Me Later will make online payments safer, easier and more convenient than ever.”
“Our classifieds acquisition gives us another market leadership position in Europe for this rapidly growing part of our portfolio,” Donahoe said.

“We are the global leader in classifieds with top positions in Canada, Australia, Germany, Japan and the United Kingdom, and sites in more than 1,000 cities across 20 countries.

The acquisition of dba.dk and bilbasen.dk gives us technology and expertise we can leverage across our classifieds portfolio to create better customer experiences.”

Commenting on the company’s workforce reduction, Donahoe said: “While never an easy decision to make, these reductions will help improve our operations and strengthen our ability to continue investing in growth.”

The company also stated it expects to hit the low end of its Q3 2008 revenue guidance and exceed GAAP and non-GAAP earnings per share guidance as issued in conjunction with its second quarter earnings release on July 16.
eBay is scheduled to announce third quarter results on October 15.
More information about Bill Me Later and dba.dk and bilbasen.dk can be found in separate press releases issued by the company today.

eBay Inc. will host an investor conference call today at 5:30 a.m. PDT to discuss this announcement. A live webcast of the conference call can be accessed through the eBay Investor Relations Web site at http://investor.ebay.com. An archive of the webcast will be accessible through the same link.

SOURCE: eBay Inc

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What are the eBay Powerseller reactions?  The following quotes were taken directly from the powerseller message board:

“After a short lived rebound into the $17.80s, the stock is falling again at $17.50.”

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“Can’t find the link/article, but read that eBay has been blocking Google Base feeds. Now, I can’t speak for the rest of you, but over 85% of my purchases were directs from Google & the lowered FVFs were bread and butter for me.

The point being, eBay and all its control freak wisdom, hosed best match and MANY other factors have drastically cut sales and eBay traffic.

What Donahoe and Pierre hoped to accomplish is not understood, but they’re certainly doing a bang up job of killing the site for both the shareholders and sellers in very little time.”

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“Quoting Donahoe:

Penetration of Paypal on Ebay grew more in the third quarter than on any time in the last several years

LOL – black and white figures don’t LIE!!!!!!
What a CROCK!!!!!!!!!!!!!!”

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“I think it’s hysterical that they think another payment method will bring more buyers to ebay more than Google Feeds would.

They are such control freaks, they can’t stand anybody else interfacing with their little piece of the pie.”

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“eBay is in trouble with Skype in China at the moment. Just read this one:

http://www.securitypronews.com/news/securitynews/spn-45-20081003SkypeScramblesAfterBreachAndCensorshipRevelations.html

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“Here’s another one:

http://www.dslreports.com/shownews/Skype-Takes-Heat-For-Chinese-Censorship-98174

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“i went and checked out that billmelater website – and I couldn’t find anywhere that it list the cost to the person/business offering the service to buyers.

also – it is a service that only takes payment from a checking or savings account. It also accepts money order payment –

I’m guessing this is going to be one of ebays answers to buyers who want to still use “paper payment” options.

though the service does access your credit report as a buyer to use the service. That would turn me off as a buyer – I don’t want a service going into my report everytime I buy something.”

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“The best part of the Bill Me Later landing page is the Featured Stores section. I wonder how much longer Overstock and Amazon will be there.”

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“If I were Wall Street, I’d view it as throwing gasoline on the fire. They need to fix the issues they already have rather than adding potentially more issues.

You know they’re going to be integrating BillMeLater into eBay eventually, and now that they own them it’s going to miraculously become a trusted payment service.”

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“eBay is scrambling for anything to generate immediate and aggressive growth – it ain’t gonna work!”

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