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The following quotes are from the transcript of John Donahoe’s rambling Legg Mason Forum presentation on 26 September 2007. Note the date: it indicates that Donahoe’s “three year turnaround” was underway prior to September 2007—therefore we are now well into the next three-year “Great Leap Forward”. Regrettably, just like in Mao’s case, there has been effectively no forward movement.

The whole of this 2007 Forum transcript really is required reading for anyone wanting to know the direction this headless turkey thinks he is taking the eBay farmyard. I particularly like the accompanying photo of the chief headless turkey, and you have to wonder why so many publishers appear to select such unflattering photos of the “eBafia Don”. Of course, once you have read these following quotes you will understand why: they obviously understand that this man is a fool.

“By using a real focus on the customer, we embarked on a series of fundamental changes that will ultimately span a three year period. We started by creating a future vision. This was critical because not everyone felt the impetus to change, given the amount of success we were experiencing. There’s a real push to keep doing what you’re doing because it’s working.”—John Donahoe (26 Sept 2007).

“We have such volume that many of our buyers said that there was too much abundance. They just want to buy a Nike watch and instead they get 12,000 results back. That’s too many. They want to get to what they want, faster. We agreed.”—John Donahoe (26 Sept 2007).

“We talk and listen to customers, but for this kind of innovation, customers don’t always know what they want.”—John Donahoe (26 Sept 2007).

“Even though people think I’m an expert at technological innovation, my own instinct for technology was frozen in place in 1982.”—John Donahoe (Sept 2007).

“Today we’re dealing with phase two or phase three [he can’t even remember which one] of disruptive innovation. We’ve had the disruption, now we must disrupt our own disruption.”—John Donahoe (26 Sept 2007).

“Based on our experience, here’s how innovation at the core worked. We had to create a mind shift at our company—we had to think bold and not just incremental. We had to create a vision of the future so people could let go of a very successful past.”—John Donahoe (26 Sept 2007).
@Achtung T Shirt bill

You sell mass quantities of cheap stuff? Then, there's probably not a lot wrong with ebay. That's who they cater to. They have geared up to reward sellers of mass quantities of cheap junk and jettison low volume sellers of higher ticket items.

If you sell low volumes of higher ticket one-of-a-kind or collectible items, Ebay and their gangster partners at Preypal are a death trap. You won't be able to average out the low DSRs from the buyers with Napoleon complexes, who get their jollys that way.

You won't be able to survive the monthly fraudulent and/or naive international buyer who opens an "item not received" case against you 2 weeks after you've shipped something to Germany via USPS 1st class or international mail because the alternatives are too expensive.

You won't be able to survive paypal giving the above crybaby buyer a refund, on your dime, within a week of his opening the claim, even though you can prove the item was shipped and is most likely sitting in his country's customs office waiting to be delivered to him.

Once he is paid off by Preypal, he will go pick it up and get it for the price of the duty. Meanwhile, since he's already gotten his refund, and his merchandise, he will neglect to cooperate with you when you ask him to sign and return the forms required by your shipping ins. company.

Then, to add insult to injury, Ebay will allow this scammer to give you low DSR's. But they will keep their FVF. So, you will be out your merchandise, Ebay and Preypal's fees, and the charges for insurance and International postage.

If each month you sell hundreds or thousands of T-Shirts, even internationally, you can probably absorb 10% of your sales ending up this way.

If you sell a couple dozen $100-$300 items per month, you can't.

But, if you rely on auctions to return a much higher price, and you rely on international sales, you don't have much choice in the matter. You are in the same position as a dependent but abused spouse. And like a wife who has seen her husband change from a nice guy to a monster, you look for an escape. But it's a lot easier said than done. And you will probably, in the long run, die due your lack of options.

None of the alternatives get even a fraction of the buyers that ebay does. How many sellers they have, or items that are listed, is irrelevant. I would rather list on a site with 5 sellers and 10 million buyers, than list on a site with 10 million sellers and 5 buyers.

The problem is that 10-20% of those buyers are stupid, naive, malicious and/or scammers. Perhaps that is true of any venue. But the difference is, unlike other venues, they are aided and abetted by their accomplices at Ebay and Preypal who's policies absolutely encourage fraud and abuse. If you sell mass quantities of cheap junk, 10-20% might be an acceptable loss ratio. For the rest of us, it's not.
eBay, PayPal, Google, Schmoogle, whatever

The rusting old hulk eBay is presently being kept afloat by PayPal so it’s good to see these boys squabbling and threats to the clunky PayPal coming thick and fast. It’s interesting times for all we eBay “haters” (oops, I mean “watchers”). I hope that someone has remembered to bring the popcorn.

PayPal is mostly registered in various places only as a “money transmitter” (like Western Union), and PayPal actually claims that they are not a “payment processor”, and there is a minute degree of truth in that claim because it could be, nonsensically, claimed that they do no more than facilitate the transmission of money by riding on the back of the retail banks’ existing payments processing systems.

In fact, the only thing creative about PayPal has been their use of users’ email addresses as an identifier for online transactions. PayPal is otherwise no more than a blood-sucking parasite on, and in the main cannot function except via, the retail banks’ existing payments system (via their banker, GE Money Bank).

PayPal, outside of whatever will ultimately be left of the Donahoe-devastated eBay Marketplace, will undoubtedly eventually be consigned to the history books by all those same banks/Visa/Mastercard once those players get their “online” act together.

Some people may not like the “banks” but all those participating banks at least supply a professionally run payments processing system; even PayPal concurs with that assessment: except for transactions between PayPal “accounts”, they use the banks’ existing payments processing system all the time and simply could not exist without it.

Regardless, all the above comments apply equally to all of the other third-party “payments processors” that are emerging out of the woodwork and wanting to have access to your banking account. Unless they have formal arrangements with all the participating retail banks, as do the likes of Visa/MasterCard, then the result is invariably going to be as potentially problematic as is PayPal’s clunky operation for its merchants.

All anyone needs to know about the clunky PayPal:

Is that PayPal’s blood in the water, and are those “sharks” (oops, “banks”) I can see circling?

Enron / eBay / PayPal / Donahoe: Dead Men Walking.

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