EBay Recharges Its Auctions

In 1998, eBay’s chief executive, Meg Whitman, changed the background color of the site’s home page from gray to white. Rather than simply switching colors overnight, though, Ms. Whitman directed eBay’s engineers to bleach the gray over the course of 30 days. At the end of the month, the company asked users if they noticed anything different. No one did.

At eBay, subtle change is about to become a thing of the past. Under pressure from analysts and investors to jump-start growth in its core auctions business, eBay is making a series of upgrades intended to make the site more friendly to buyers. In so doing, it may have to endure a torrent of criticism from more than 700,000 sellers who rely on eBay for their livelihoods and who have firm ideas of their own about how best to serve buyers.

“We have to make sure our old users stay with us, but we’re going to be more bold around product changes than we’ve been in the past,” Ms. Whitman said in an interview last week in Boston at eBay Live, an annual conference for the site’s sellers. “I think people expect more from eBay.”

Certainly, analysts do. As the company has expanded beyond its auctions business into Internet telephone service (with its acquisition of Skype), event ticketing (with StubHub) and comparison shopping (with Shopping.com), auction volume has slowed considerably from years past. As of early this month, the volume of eBay’s United States listings was down by 3.8 percent compared with a year earlier, according to Citigroup.

Analysts said sellers were moving to other places on the Web in search of buyers who had grown weary of an overwhelming array of product choices on eBay. “You could go to the site looking for Star Wars items and get the same results as you’d have had in 1999 — a thousand results all sorted by what auction is closing first,” said Mark Mahaney, an analyst with Citigroup. “Are you looking for a Star Wars pendant? Poster? DVD? It doesn’t matter. You’ll see everything.”

Ms. Whitman said that chief among the changes was a new home page design. The company is testing simplified layouts that are less likely to confuse shoppers than the old version, which analysts said was among the most cluttered in the e-commerce industry.

EBay is also testing new ways to deliver search results. Instead of heading each list of results with items whose auctions are about to expire, the company will in the coming months give users the option of seeing search results headed by items the company predicts will be most appealing to buyers — a measure determined in part by how well sellers have been rated by other buyers on eBay.

The changes are still being tweaked and tested in anticipation of wider rollouts in August, Ms. Whitman said, but early results are promising.

“We’re optimistic that the changes will translate to accelerated growth and help us change the trajectory of our two largest markets, U.S. and Germany,” she said.

The company does not disclose its gross sales volume by specific regions, but net revenue in the United States market increased by just 1 percent in the latest quarter, compared with a year earlier. According to Citigroup, the listings on eBay’s German site had dropped by 16.5 percent earlier this month, compared with the similar time last year.
According to Ina Steiner, editor of AuctionBytes.com, a Web site that closely tracks eBay’s merchants, the site’s sellers will probably balk at some of the proposed changes, like the new search results formula.

“There’s always this fear among them that the company is going to favor certain sellers over others,” Ms. Steiner said. “How will they be able to trust that that’s not happening with this?”

Like it or not, though, sellers will have to expect change, Ms. Steiner said. “EBay’s really feeling the maturation of the market, and they’re desperate to bring more buyers to the site,” she said. “They have to do something.”

http://www.nytimes.com/2007/06/18/technology/18ecom.html?ref=technology