More Bad News for eBay

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Just when you thought that it couldn't get any harder for, along comes Go Daddy.

Go Daddy Marketplace launched on Tuesday, offering sellers a compelling model where they pay $4.99 a month for unlimited item listings. They are charged an additional 10% commission on any completed sales.

eBay (Nasdaq: EBAY  ) is unlikely to lose any sleep over a new marketplace competitor. It has taken on the consumer auction initiatives of dot-com heavies like (Nasdaq: AMZN  ) , Yahoo! (Nasdaq: YHOO  ) , and (Nasdaq: OSTK  ) in the past, and it's still the undisputed belle of the bidders' ball.

However, eBay is in no position to be cocky. It is coming off a quarter in which its marketplace revenue tumbled 16%. It's not a matter of it being susceptible. It's been hit, and hit hard.

Between niche auction sites, edgy retailers like (Nasdaq: BIDZ  ) (that takes anentertaining spin on moving jewelry), and a plethora of Craigslist wannabe free listing sites, eBay is unlikely to ever command the type of market share that it once owned in its prime.

Does Go Daddy Marketplace have a chance as a fixed-price bazaar? Of course. You have to love the timing. Go Daddy attracts more than 2 million monthly visitors, according to comScore. They are drawn to the site's cheap domain name registrations and competitively priced webhosting services. Traffic at the site tends to spike this time of year, as the company dusts off its racy Super Bowl ads. It is letting its visitors get in on the interactive fun, allowing them to vote for one of two steamy Danica Patrick ads to run during next weekend's big game.

$5 a month is a pittance for most cottage industries, assuming they can live with the 10% commission fees on completed sales. The site already draws Web entrepreneurs for its domain services, so it's already reaching plenty of budding e-tailers. The product marketplace will also draw in sellers that Go Daddy can then try to convert into hosting accounts. All of the pieces fit, even if the Go Daddy Marketplace is slow to get off the ground.

Either way, it's just one more shovel of dirt over eBay's shallow grave.

If "buy it now" doesn't work, how about "read it now" for these recent headlines:

eBay is a Motley Fool Inside Value selection. eBay and are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz is a satisfied eBay user with 177 positive feedbacks to show for it. He does not own shares in any of the companies in this story. He is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.

Read/Post Comments (14) | Recommend This Article (16)

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  • Report this Comment On January 23, 2009, at 3:29 PM, southard wrote:

    The author has written a string of articles negative on Ebay over very minor issues. The whole economy is in the tank and Ebay has very little debt. Ebay has a strong position in the auction of used items. I can only believe due the constant mantra of EBAY is going to grave this and grave that.. that the author is either personally short the stock or stands to benefit in some way by being so overwhelmingly biased. This isn't a for sure short by any means. Rather this will probably prove to be an excellent entry price for a slow growth company that will be around for many many years. The one foot in the grave stuff has to go.

    The more I read articles on the the more I realize they are just pumping or dumping this or that stock usually so they can sell their newsletters. The fool used to be a really educational site full of real insight. These days it just seems that its just recycled garbage. Sorry but I usually pass on motley fool articles these days.

  • Report this Comment On January 23, 2009, at 3:36 PM, Patricia013 wrote:

    You'll be hard-pressed to find many sellers who feel sorry for Ebay these days. Don't forget, John Donahoe came in smugly in January 2008 and proclaimed that the place had a flea market look to it and called the small sellers "noise" and the sellers NEVER forgot it! Now, one year later and many outrageous draconian policies later, Ebay reports the first decline its ever had and if you can't make it in the holiday season then you are in dire straits! Yes, Ebay is hurting HARD but for some reason they are plodding on arrogantly thinking something magical will happen and everything will be okay again. What needs to happen is a complete cleanout from the top of the administration on down. Mr. Donahoe and his crew need to go...his idea of "distruptive innovation" not only didn't work, its bringing down a once healthy and wealthy company and put thousands upon thousands of small sellers out of business! So, as I said, you'd be hard-pressed to find many sellers who feel anything for the monster that is on its knees...they are waiting to see it grovel...which could well happen after this next quarter! At this time and with the present management, Ebay cannot compete with Amazon. It never should have attempted it in the first place...but it did and it did so at the cost of thousands of small sellers! A team experienced in sales would never have undertaken such a foolish move as to destroy a good business model that simply needed tweaking in favor of an unknown one.

    As for the "noise" for the most part we've moved on. We've opened our own websites and we're supporting the small up and coming sites and the larger of us have gone to Amazon. Here comes a point even MORE dangerous than any other thing facing Ebay....sellers and their buyers are beginning to FORGET Ebay and they're beginning not to care. They're at other sites and they are making sales (there are no sales for them on Ebay these days). They're becoming accustomed to having fun again and to managing their businesses as they see fit without big brother dipping his paw into it and barking orders. So, Mr. Donahoe, you reaped what you sowed and I bet the lack of "noise" is deafening!

    We are witnessing the beginning of the end for Ebay!, free shop, free listings, small fee when you sell.

  • Report this Comment On January 23, 2009, at 4:08 PM, rexxsales wrote:

    If Go Daddy markets their market place like they market their other services it may do very well. 10's of thousands of eBay sellers are anxiously awaiting a viable eBay alternative so many will jump off the eBay ship to try it.

  • Report this Comment On January 23, 2009, at 4:37 PM, stockpile28 wrote:

    I would have to agree with patricia013, Ebay's policies are a joke and most of the "Good" sellers are po'd and leaving. then you have the seller and Paypal fee's that are too high, and don't forget about the rampant fraud that's running through the place. I could go on and on. it's pretty hard not to write negative comment's about them, especially if you've ever sold there.

  • Report this Comment On January 23, 2009, at 6:15 PM, wwen wrote:

    Just look at the marketplace It is a joke. how many mp3 player on the site, 1? cell phone? 6! this is BAD news for eBay ;-) you must be kidding.

    Although I don't like what eBay is doing, the author of this article should find something more meaningful to write.

  • Report this Comment On January 23, 2009, at 6:19 PM, blackmare wrote:

    Hm. I've never sold anything on eBay. I wanted to, but the cost to set up a shop, and then the totally unpredictable fee schedule -- it was more than I cared to deal with. Since I'm an artist, I went to instead. No auctions, but also no surprises.

    My websites and hosting are done through GoDaddy, and I love them. Their prices are very reasonable, they've always been honest with me (even pointing out when I was spending money I didn't need to spend), and their customer service is incredibly good. If I were going to do online auctions, I'd choose GoDaddy's simple model over eBay's confusing and unpredictable fees, hands down.

  • Report this Comment On January 23, 2009, at 8:30 PM, bozobills wrote:

    having been an ebayer for years I am not surprized that ebay is off a tick or two,after the way they treat thier customers and faithful clients, why would one believe that they give a hoot about the holders, ebay has some serious business model flaws that have come about in the last few years. To some it up I aint running over anyone to own this dyin breed!!

  • Report this Comment On January 23, 2009, at 8:38 PM, teddychan wrote:


    Go Daddy Marketplace launched 3 days ago, what did you expect vs. a site that's been around for well over a decade?

    If you think eBay is unconcerned about Go Daddy, you're dreaming. eBay is losing sellers and buyers by the thousands as evidenced by their latest sad financial reports. Any company that can afford to advertise on the Super Bowl every year obviously has the capital to become a potentially viable competitor to eBay.

    Amazon is already kicking the crap out of eBay's tired old business model.

    Who the hell wants to sell on a dying site that charges 3 layers of ever-increasing fees: when you list, when you sell, and when you get paid?

  • Report this Comment On January 23, 2009, at 8:48 PM, artistx wrote:

    I have been an Ebayer since the beginning and have slowly weened most of my sales and purchases to more focused venues. There are enough free venues/sites that have specific readers for my specific needs (buying or selling). General stuff usually gets bought and sold on Craigslist and occasionally Ebay. While sites like Luminous Landscape and Photonet for cameras don't have ratings systems for sellers/buyers most have histories and you can read comments, etc. I find this more reassuring than 20stars and "A+++" Even sites like Etsy for handmade items have the type of clients that actually leave helpful comments. I think searching (and obvious enormous selection) on Ebay is still their main strength but pricing is their weakness. In this market pricing can be the difference. Because of the cost of doing business on Ebay I have gone from 10+ items (buy/sell) a week to 10 a year.

  • Report this Comment On January 23, 2009, at 9:07 PM, teddychan wrote:

    I dumped my eBay silver PS account, told them they can have it, I don't need it any longer. I have started looking into and have been impressed by what I've seen so far.

  • Report this Comment On January 24, 2009, at 12:48 PM, Ecomike wrote:

    Very interesting read, both sides. Bad management can devour any company even in a good market.

    I have been an Ebay buyer since 2000, but after reading this I now wonder. I have done buying and selling on Craig's list and been pleased, and it is free. I have never been impressed with godaddy. One of the advantages of Ebay has been its size (number of auctions and sellers), and it's feedback seller ranking history, and internal search engine, but Google has changed the search engine advantage in the favor of Ebay competitors.

    Only really bad management can kill Ebay at this point, but it sure sounds like it is stock to short for the time being.

  • Report this Comment On January 24, 2009, at 4:50 PM, dangenuity wrote:

    GoDaddy only attracts "wannabe" sellers and entrepreneurs, not buyers! And the 10% commission is higher than you would pay on eBay/PayPal put together. In addition, you need to read the fine print... they will pay you by check (beginning at once a month or once a week when your average sales exceed their nice 10% commission) or they will pay you via PayPal (and then you pay more fees). On eBay, you get paid immediately with PayPal and it goes straight to you, that means you have the money to pay for shipping. GoDaddy and Amazon both require you to ship first and get paid later! And you still risk buyer complaints and chargebacks when the buyer is not happy, just like you would on eBay.

  • Report this Comment On January 27, 2009, at 7:11 PM, NYMArts wrote:

    Listen to me :

    Ebay is on the Rocks ONLY BECAUSE of C.E.O. John Donahoe.

    To belive otherwise is a COMPLETE DISPLAY OF IGNORANCE.

    NOW, Go to : for an EYEFULL of what's in store for Ebay in 2009.

    Click on the REQUIRED READING links.

    It MAY impact you DIRECTLY.

    STOP spreading the B.S. that Ebay is another victim of the Economy.

    It JUST is NOT True.

    Boots on the Ground baby.

  • Report this Comment On July 07, 2011, at 10:23 AM, chickpeafromhell wrote:

    That stuck up John Donahue is going to learn to not mess with the "little people". The little people gave ebay it's edge and made it the billion dollar international corporation that is was. Now that idiot is practically spitting on half the community (sellers) with his pompous attitude.

    Donahue will be seen as the person who brought about ebay's downfall with his irreverant and callous attitude towards a large group of people. His narrow inflexible focus on numbers, will be seen as a weakness.

    No one, will ever hire him again as a CEO of ANY company.

    He never was a CEO of a company, and snuck in through the backdoors. Which is how such a deplorable attitude towards a large population of ebay's base was basically "spit on" with his callous and pompous comments.

    I have been a good and loyal seller since 1998 for over 13 years (yikes!)...with many many many satisfied customers (98% and the other 2% didn't care to read the auction description and blamed me for their laziness???!). But right now after they cancelled my seller priveledges this past year for some ridiculous buyers who didn't bother to read the description (those will always be around and have been for the past decade...they are called STUPID...and ebay is wasting time and should not cater to buyers who aren't buying responsibly). They are "dumbing down the site". And you know what happens when a company or what not, don't treat people as intelligent beings with respect?

    For the first time, I really don't care about the site. I think to myself "bye bye eBay, bye byeeee...". (and this is what I felt even before I heard of that Donahue's nasty comments! Now reading about it, only confirms my suspicions on how screwed up the site and its policies have become!!). The site looks like big corporation garbage now, and has lost it's very personal flair.

    The CEO got to confident, cocky, and arrogant at ebay's global prowess. He forgot where that came from... It came from the "Mom and Pop" sellers that you so-called "noise". Wow, what a mistake...

    You're an IDIOT, Donahue. If they don't get rid of that guy soon, the whole company is *DESTINED* to take a turn for the worse (from what it once was...). And I don't care what sort of clout he built-up internally within the company culture from his doubling earnings of ebay Marketplace (2000-2005). It's not just numbers. He's not fit to be CEO. He's not the right person for that position.

    Hire an outsider who understands what brought ebay to billions. I have just an ounce of sympathy left for the company. If they pull off THAT MOVE, I will have *so much respect* for ebay for firing one of their own, in order to save the entire ship.

    You can do it, ebay! Fire the man, he deserves it and is not right for such a high-profile position. You will earn back the respect of thousands upon thousands that you lost. ebay should be thriving in an economy where everyone is looking for a bargain. But it isn't. Why? Two words... John Donahue. Let him take his $10 million salary and go live on a far, far, far awaaaay, remote island.

    Ebay, are you listening? Fire the man. The board of trustees needs to save the company's ass and fire one of their own who is out of touch with the company's strength (moms and pops). Meg, are you listening? Get him fired somehow. PLEAAASE!

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