Executives at eBay are shifting their focus away from ordinary people selling their used goods.
eBay executives have announced that gone are the days of competing with retailers such as Amazon.com and WalMart.com. Now, the company is moving into a completely different realm: mobile opportunity.
The company is aiming to develop wireless applications for the company’s PayPal payment processing system as well as its VoIP calling unit, Skype. John Donahoe, eBay chief executive said that the company will begin to center its efforts online in the “secondary market” of clearance and off-season goods, rather than the sale of ordinary people's used items.
The company hopes that its PayPal payment processing system will also drive more revenue. The company expects the system to deliver $US4 billion to $US5 billion in revenue by 201 -- an increase from the $US2.4 billion which was earned last year. If these forecasts are correct, then PayPal will become eBay’s greatest individual revenue producer. Over the next three years, Scott Thompson, president of PayPal, would need to double its volume to anywhere from $100 billion and $120 billion.
Donahue believes that the core auction market of eBay will continue to decline as the company moves toward selling fixed price (buy-it-now) listings. The company plans to push the site as an outlet for liquidating retail stock.
While this strategy may be very unpopular with eBay's traditional market of small-time sellers and buyers, it does mean that there will be an even stronger market opportunity for competitors to eBay to get a foothold in this space. eBay has repeatedly been criticised for abusing its near monopoly market power in the online auction space to disadvantage buyers and sellers with higher fees and unfair terms of trade.
eBay Australia last year attracted the fury of its users after it tried to force people to pay for their auctions using PayPal only, banning all other methods of electronic payment. The plan ultimately failed at the 11th hour, with eBay fearful of an unfavourable legal outcome against it.