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eBay's Looming Cultural Headache
From Kevin Maney: It seems that consumers are deciding that eBay's online auctions are too much hassle. That's not just a business problem for eBay, it's a deep corporate culture problem, like McDonald's finding out people no longer like hamburgers.
I've been writing about eBay since its earliest days. The company's core has always run on the energy generated by on-line auctions. It wasn't just selling stuff like Amazon -- it was a game. eBay attracted certain employees, sellers and consumers because of the auctions. It's always been why eBay was different than any other retailer and different, too, from Craigslist or newspaper classifieds. eBay's TV commercials, even now, emphasize auctions and "winning" the item you buy.
But as Business Week reports, auctions my soon, for the first time in eBay's history, become the minority of transactions on eBay. The site's "Buy It Now" fixed-price transactions already make up 42% of all goods sold on eBay, and it's growing 22% a year. Consumers increasingly prefer to use search to find good fixed-price deals, instead of hassling with auctions. The auctions might be a fun game for a segment of consumers, but for a lot of people, an auction sucks up time and effort for a product you might not end up winning.
New CEO John Donahue may have a bunch of tactical issues to address, but if the decline of auctions threatens eBay's culture -- corporations have trouble recovering from that kind of mess.
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