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EBay's Unhappy Christmas

The holidays have traditionally been a robust period for eBay, but not this year says The Wall Street Journal, citing the company's slide in visitor traffic and deteriorating sales. According to research from comScore, weekly traffic to eBay fell 16% between Nov. 3 and Dec. 14 from a year ago. By comparison, fixed-price competitor Amazon had 6% more unique visitors over the same time period, leading many analysts to question where the edge is online auctioneering.

Indeed, Lorrie Norrington, the president of eBay Marketplaces, declined to comment on the company's holiday sales. "We are still three times the volume of the competition and driving hard to make aggressive deals in a tough environment," Norrington said.

The Journal suggests that eBay's expectedly shabby performance this quarter reflects the changes brought in by eBay CEO John Donahoe. Donahoe's most significant move was to move the company further in the direction of fixed-price sellers like Amazon, Wal-Mart and Sears, which consumers tend to prefer for speed and convenience. Donahoe also cut the fee to list fixed-price items while boosting the fee for item sales--a model that helps fixed-price sellers' profits. However, not only have the changes had little financial impact, they've also angered many eBay loyalists: buyers are confused by the combined auction and fixed price listings, while sellers feel eBay is making the site too difficult to navigate.

Read the whole story at The Wall Street Journal »

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