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Category:eBay (EBAY)
Date: 4 February 2021 Stock price of eBay (EBAY): $58.04 We take a more detailed look at eBay (EBAY) a global commerce leader, which includes our Marketplace, StubHub (recently sold to viagogo) and Classifieds platforms. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity.
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eBay Inc. is a global commerce leader, which includes our Marketplace, StubHub and Classifieds platforms. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity"
More About eBay (EBAY)
eBay Inc. was formed as a sole proprietorship in September 1995 and was incorporated in California in May 1996. In April 1998, we reincorporated in Delaware, and in September 1998, we completed the initial public offering of our common stock. Our principal executive offices are located at 2025 Hamilton Avenue, San Jose, California 95125, and our telephone number is (408) 376-7008.
When we refer to “eBay Inc.” we mean our Marketplace, StubHub and Classifieds platforms. On November 24, 2019, we entered into a definitive agreement for eBay to sell StubHub to viagogo, with closing of the transaction expected to occur in the first quarter of 2020. eBay Inc. is a global commerce leader, which includes our Marketplace, StubHub and Classifieds platforms. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity. Our technologies and services are designed to give buyers choice and a breadth of relevant inventory and to enable sellers worldwide to organize and offer their inventory for sale, virtually anytime and anywhere.
Our Marketplace platforms include our online marketplace located at www.ebay.com, its localized counterparts, including off-platform businesses in Korea, Japan and Turkey and the eBay suite of mobile apps. We believe that these are among the world’s largest and most vibrant marketplaces for discovering great value and unique selection. StubHub platforms include the online ticket platform located at www.stubhub.com, its localized counterparts and the StubHub mobile apps. These platforms connect fans with their favorite sporting events, shows and artists and enable them to buy and sell millions of tickets annually, whenever and wherever they want.
Our Classifieds platforms include a collection of brands such as mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen and others. Offering online classifieds around the world, these platforms help people find what they are looking for in their local communities. Our platforms are accessible through a traditional online experience (e.g., desktop and laptop computers), mobile devices (e.g., smartphones and tablets) and our application programming interfaces or APIs (platform access for third party software developers). Our multi-screen approach offers downloadable, easy-to-use applications for iOS and Android mobile devices that allow access to ebay.com and some of our other websites and vertical shopping experiences. Our platform is increasingly based on open source technologies that provide industry-standard ways for software developers and merchants to access our APIs and develop software and solutions for commerce. In 2019, we launched new API capabilities to give thirdparty developers access to eBay programs like managed payments
When we refer to “eBay Inc.” we mean our Marketplace, StubHub and Classifieds platforms. On November 24, 2019, we entered into a definitive agreement for eBay to sell StubHub to viagogo, with closing of the transaction expected to occur in the first quarter of 2020. eBay Inc. is a global commerce leader, which includes our Marketplace, StubHub and Classifieds platforms. Collectively, we connect millions of buyers and sellers around the world, empowering people and creating opportunity. Our technologies and services are designed to give buyers choice and a breadth of relevant inventory and to enable sellers worldwide to organize and offer their inventory for sale, virtually anytime and anywhere.
Our Marketplace platforms include our online marketplace located at www.ebay.com, its localized counterparts, including off-platform businesses in Korea, Japan and Turkey and the eBay suite of mobile apps. We believe that these are among the world’s largest and most vibrant marketplaces for discovering great value and unique selection. StubHub platforms include the online ticket platform located at www.stubhub.com, its localized counterparts and the StubHub mobile apps. These platforms connect fans with their favorite sporting events, shows and artists and enable them to buy and sell millions of tickets annually, whenever and wherever they want.
Our Classifieds platforms include a collection of brands such as mobile.de, Kijiji, Gumtree, Marktplaats, eBay Kleinanzeigen and others. Offering online classifieds around the world, these platforms help people find what they are looking for in their local communities. Our platforms are accessible through a traditional online experience (e.g., desktop and laptop computers), mobile devices (e.g., smartphones and tablets) and our application programming interfaces or APIs (platform access for third party software developers). Our multi-screen approach offers downloadable, easy-to-use applications for iOS and Android mobile devices that allow access to ebay.com and some of our other websites and vertical shopping experiences. Our platform is increasingly based on open source technologies that provide industry-standard ways for software developers and merchants to access our APIs and develop software and solutions for commerce. In 2019, we launched new API capabilities to give thirdparty developers access to eBay programs like managed payments
Agreement By eBay To Sell StubHub
On November 24, 2019, following a strategic review of our assets, we entered into a definitive agreement to sell StubHub to viagogo for a purchase price of $4.05 billion in cash. Please see the information in “Item 1A: Risk Factors” under the caption “The closing of the proposed sale of StubHub is subject to various risks and uncertainties, may not be completed in accordance with expected plans or on the currently contemplated timeline, or at all, and the pending sale may be disruptive to StubHub.”
Strategy Of eBay
Delivering the best choice, the most relevance and the most powerful selling platform
Our strategy is to drive the best choice, the most relevance and the most powerful selling platform for our buyers and sellers. We focus on connecting buyers and sellers through simplified experiences to make it easier for users to list, buy and sell items, and we are working to serve our customers in an authentically eBay way. On our Marketplace platform, our strategy is to drive the best choice by attracting and retaining sellers and brands that bring differentiated inventory to eBay and provide our consumers with great selection and value. This includes new, everyday items as well as rare and unique goods, many of which are available with free shipping and delivery in three business days or less. Our vision is to provide buyers with value and selection through the spectrum of value of the inventory. We continue to invest in product and initiatives to evolve the customer experience, making it easier for buyers to find inventory on the platform. As a trusted ticket marketplace, StubHub brings the joy of live events to fans globally. In 2019, over 268 million visitors came to StubHub to buy or sell tickets to live sports, music, theater and other events. StubHub business partners include more than 100 leagues, teams, venues, events or other major third-party companies in the U.S. and internationally across major sports leagues such as the NFL, MLB, MLS, NBA, NHL, and the NCAA. StubHub is a leader in mobile innovation, with roughly 60% of its orders coming from mobile in 2019. A world leader in online classifieds, eBay Classifieds is designed to help people list their products and services, generally for free, find what they are looking for in their local communities and trade at a local level. eBay Classifieds Group’s brands offer both horizontal and vertical experiences, such as motors, real estate and jobs. We offer a personalized classifieds experience and focus on expanding our value proposition by leveraging data and analytics to improve customer relevance and grow the classifieds opportunity on mobile.
Business model and pricing
On eBay and StubHub, our business model and pricing are designed so that our business is successful primarily when our sellers are successful. We make money primarily through fees collected on successfully closed sales. On our Classifieds platform, we monetize our business primarily through advertising. In 2019, managed payments adoption accelerated in the U.S. and the service launched in Germany. Since we began intermediating payments in 2018, we processed over $2.0 billion in payments for nearly 25,000 sellers through December 31, 2019. Our advertising business remains focused on growing our promoted listing fees (first-party advertising business) while reducing non-strategic third-party advertising in a manner that is conducive to growth in our core Marketplace; over 1 million sellers used the product, promoting over 320 million live listings in 2019.
Our offerings for buyers and sellers
We provide a number of features for our buyers and sellers that are designed to build trust, help users feel more comfortable buying and selling on our platforms and reward our top sellers for their loyalty. We believe that, through our sellers, eBay offers some of the best value and deals available for a number of consumer products. Buyers seek out eBay because they can find an enormous breadth of inventory and a spectrum of value from the brand new to the hard-to-find. 2 On the Marketplace platform, we continue to explore new tools and features that are intended to create a better buying experience on eBay, including Visual Shopping via Computer Vision, Right Offer at the Right Time, and Buy Again. In order to remain competitive and create a vibrant seller experience, eBay continuously invests in tools and programs to grow the seller ecosystem because we only win when our sellers succeed. In 2019, we added analytics and merchandising tools to our Seller Hub that are designed so that sellers know what to sell, when to sell it and at what price. The 2019 additions of Multi-User Account Access, along with the Terapeak integration, enable sellers to better manage their business and add additional analytics insights into the platform. We also established new seller protections, including two new financial protections for top-rated sellers located in the U.S. who offer 30-day returns. First, eBay will issue a seller invoice credit to cover return label cost if a buyer makes a false “item not as described” claim. Second, eBay now allows these sellers to issue partial refunds for all items that are returned damaged. eBay also has processes that allow sellers to report buyers who violate policies. eBay is committed to maintaining a safe and trusted marketplace.
In order to further strengthen our buyers’ confidence and trust in our services, we offer eBay Money Back Guarantee, which allows buyers to get their money back if the item they ordered does not arrive, is faulty or damaged, or if it does not match the listing. eBay Money Back Guarantee covers most items purchased on the eBay platform in a number of countries, including the U.S., the U.K., Germany and Australia, through a qualifying payment method. Some purchases, including some vehicles, are not covered. We also offer eBay Authenticate, through which sellers can have their high-end handbags, luxury watches and jewelry authenticated. The program is available in the United States as well as in the U.K. and Germany. We also provide our customers with a Best Price Guarantee, which offers buyers in the United States 110 percent of the price difference if they find an item for less on a competitor’s website within 48 hours of making a purchase. In Australia, Best Price Guarantee beats deals from approved retailers by 5%, and in U.K., offers price matching. For buyers, we want to create greater confidence in our ability to meet their delivery and buying expectations and to improve the reliability of our shipping times and tracking. The majority of our transactions on the eBay Marketplace in the U.S., the U.K., and Germany include free shipping, and we encourage sellers to offer free returns. Through eBay Guaranteed Delivery, we provide faster and more precise delivery dates on millions of eligible items.
Our strategy is to drive the best choice, the most relevance and the most powerful selling platform for our buyers and sellers. We focus on connecting buyers and sellers through simplified experiences to make it easier for users to list, buy and sell items, and we are working to serve our customers in an authentically eBay way. On our Marketplace platform, our strategy is to drive the best choice by attracting and retaining sellers and brands that bring differentiated inventory to eBay and provide our consumers with great selection and value. This includes new, everyday items as well as rare and unique goods, many of which are available with free shipping and delivery in three business days or less. Our vision is to provide buyers with value and selection through the spectrum of value of the inventory. We continue to invest in product and initiatives to evolve the customer experience, making it easier for buyers to find inventory on the platform. As a trusted ticket marketplace, StubHub brings the joy of live events to fans globally. In 2019, over 268 million visitors came to StubHub to buy or sell tickets to live sports, music, theater and other events. StubHub business partners include more than 100 leagues, teams, venues, events or other major third-party companies in the U.S. and internationally across major sports leagues such as the NFL, MLB, MLS, NBA, NHL, and the NCAA. StubHub is a leader in mobile innovation, with roughly 60% of its orders coming from mobile in 2019. A world leader in online classifieds, eBay Classifieds is designed to help people list their products and services, generally for free, find what they are looking for in their local communities and trade at a local level. eBay Classifieds Group’s brands offer both horizontal and vertical experiences, such as motors, real estate and jobs. We offer a personalized classifieds experience and focus on expanding our value proposition by leveraging data and analytics to improve customer relevance and grow the classifieds opportunity on mobile.
Business model and pricing
On eBay and StubHub, our business model and pricing are designed so that our business is successful primarily when our sellers are successful. We make money primarily through fees collected on successfully closed sales. On our Classifieds platform, we monetize our business primarily through advertising. In 2019, managed payments adoption accelerated in the U.S. and the service launched in Germany. Since we began intermediating payments in 2018, we processed over $2.0 billion in payments for nearly 25,000 sellers through December 31, 2019. Our advertising business remains focused on growing our promoted listing fees (first-party advertising business) while reducing non-strategic third-party advertising in a manner that is conducive to growth in our core Marketplace; over 1 million sellers used the product, promoting over 320 million live listings in 2019.
Our offerings for buyers and sellers
We provide a number of features for our buyers and sellers that are designed to build trust, help users feel more comfortable buying and selling on our platforms and reward our top sellers for their loyalty. We believe that, through our sellers, eBay offers some of the best value and deals available for a number of consumer products. Buyers seek out eBay because they can find an enormous breadth of inventory and a spectrum of value from the brand new to the hard-to-find. 2 On the Marketplace platform, we continue to explore new tools and features that are intended to create a better buying experience on eBay, including Visual Shopping via Computer Vision, Right Offer at the Right Time, and Buy Again. In order to remain competitive and create a vibrant seller experience, eBay continuously invests in tools and programs to grow the seller ecosystem because we only win when our sellers succeed. In 2019, we added analytics and merchandising tools to our Seller Hub that are designed so that sellers know what to sell, when to sell it and at what price. The 2019 additions of Multi-User Account Access, along with the Terapeak integration, enable sellers to better manage their business and add additional analytics insights into the platform. We also established new seller protections, including two new financial protections for top-rated sellers located in the U.S. who offer 30-day returns. First, eBay will issue a seller invoice credit to cover return label cost if a buyer makes a false “item not as described” claim. Second, eBay now allows these sellers to issue partial refunds for all items that are returned damaged. eBay also has processes that allow sellers to report buyers who violate policies. eBay is committed to maintaining a safe and trusted marketplace.
In order to further strengthen our buyers’ confidence and trust in our services, we offer eBay Money Back Guarantee, which allows buyers to get their money back if the item they ordered does not arrive, is faulty or damaged, or if it does not match the listing. eBay Money Back Guarantee covers most items purchased on the eBay platform in a number of countries, including the U.S., the U.K., Germany and Australia, through a qualifying payment method. Some purchases, including some vehicles, are not covered. We also offer eBay Authenticate, through which sellers can have their high-end handbags, luxury watches and jewelry authenticated. The program is available in the United States as well as in the U.K. and Germany. We also provide our customers with a Best Price Guarantee, which offers buyers in the United States 110 percent of the price difference if they find an item for less on a competitor’s website within 48 hours of making a purchase. In Australia, Best Price Guarantee beats deals from approved retailers by 5%, and in U.K., offers price matching. For buyers, we want to create greater confidence in our ability to meet their delivery and buying expectations and to improve the reliability of our shipping times and tracking. The majority of our transactions on the eBay Marketplace in the U.S., the U.K., and Germany include free shipping, and we encourage sellers to offer free returns. Through eBay Guaranteed Delivery, we provide faster and more precise delivery dates on millions of eligible items.
Competition Of eBay
We encounter vigorous competition in our business from numerous sources. Our users can list, sell, buy, and pay for similar items through a variety of competing online, mobile and offline channels. These include, but are not limited to, retailers, distributors, liquidators, import and export companies, auctioneers, catalog and mail-order companies, classifieds, directories, search engines, commerce participants (consumer-to-consumer, business-to-consumer and business-to-business), shopping channels and networks. As our product offerings continue to broaden into new categories of items and new commerce formats, we expect to face additional competition from other online, mobile and offline channels for those new offerings. We compete on the basis of price, product selection and services, and global scale. For more information regarding risks of competition, see the information in “Item 1A: Risk Factors” under the captions “Substantial and increasingly intense competition worldwide in ecommerce may harm our business” and “We are subject to regulatory activity and antitrust litigation under competition laws that could adversely impact our business.” 4 To compete effectively, we will need to continue to expend significant resources in technology and marketing. These efforts require substantial expenditures, which could reduce our margins and have a material adverse effect on our business, financial position, operating results and cash flows and reduce the market price of our common stock and outstanding debt securities. Despite our efforts to preserve and expand the size, diversity and transaction activity of our buyers and sellers and to enhance the user experience, we may not be able to effectively manage our operating expenses, to increase or maintain our revenue or to avoid a decline in our consolidated net income or a net loss.
Seasonality Of eBay Earnings
We expect transaction activity patterns on our platforms to mirror general consumer buying patterns and expect that these trends will continue.
Sales And Marketing Of eBay
Sales and marketing expenses primarily consist of advertising and marketing program costs (both online and offline), employee compensation, certain user coupons and rewards, contractor costs, facilities costs and depreciation on equipment. Online marketing expenses represent traffic acquisition costs in various channels such as paid search, affiliates marketing and display advertising. Offline advertising primarily includes brand campaigns and buyer/seller communications. The decrease in sales and marketing expense in 2019 compared to 2018 was primarily due to a favorable impact from foreign currency movements relative to the U.S. dollar and decreases in offline advertising spend and employee-related costs. These costs were partially offset by online marketing spend and user coupons and rewards largely driven by our Japan platform acquired in the second quarter of 2018. The increase in sales and marketing expense in 2018 compared to 2017 was primarily due to an increase in user coupons and rewards and traffic acquisition costs.
Product Development Of eBay
Product development expenses primarily consist of employee compensation, contractor costs, facilities costs and depreciation on equipment. Product development expenses are net of required capitalization of major platform and other product development efforts, including the development and maintenance of our technology platform. Our top technology priorities include payment intermediation capabilities and improved seller tools and buyer experiences built on a foundation of structured data. Capitalized internal use and platform development costs were $137 million and $147 million in 2019 and 2018, respectively, and are primarily reflected as a cost of net revenues when amortized in future periods. The decrease in product development expenses in 2019 compared to 2018 was primarily due to decreases in employee-related costs, foreign currency movement relative to the U.S. dollar and depreciation on equipment. The increase in product development expenses in 2018 compared to 2017 was primarily due to an increase in employee-related costs, partially offset by a decrease in depreciation on equipment.
The market for semiconductor and electronics industries is characterized by rapid technological development and product innovation. These technical innovations are inherently complex and require long development cycles and appropriate professional staffing. We believe that continued and timely development of new products and enhancements to existing products are necessary to maintain our competitive position. Accordingly, we devote a significant portion of our human and financial resources to research and development programs and seek to maintain close relationships with customers to remain responsive to their needs. In addition, we may enter certain strategic development and engineering programs whereby certain government agencies or other third parties fund a portion of our research and development costs. As of June 30, 2020, we employed approximately 2,870 full-time research and development personnel. Our key research and development activities during the fiscal year ended June 30, 2020 involved the development of process control and process-enabling solutions for a broad range of industries including semiconductors, printed circuit boards and displays.
The strength of our competitive positions in many of our existing markets is largely due to our leading technology, which is the result of our continuing significant investments in product research and development. Even during down cycles in the semiconductor industry, we have remained committed to significant engineering efforts toward both product improvement and new product development in order to enhance our competitive position. New product introductions, however, may contribute to fluctuations in operating results, since customers may defer ordering existing products, and, if new products have reliability or quality problems, those problems may result in reduced orders, higher manufacturing costs, delays in acceptance of and payment for new products, and additional service and warranty expenses. There can be no assurance that we will successfully develop and manufacture new products, or that new products introduced by us will be accepted in the marketplace. If we do not successfully introduce new products, our results of operations will be adversely affected.
The strength of our competitive positions in many of our existing markets is largely due to our leading technology, which is the result of our continuing significant investments in product research and development. Even during down cycles in the semiconductor industry, we have remained committed to significant engineering efforts toward both product improvement and new product development in order to enhance our competitive position. New product introductions, however, may contribute to fluctuations in operating results, since customers may defer ordering existing products, and, if new products have reliability or quality problems, those problems may result in reduced orders, higher manufacturing costs, delays in acceptance of and payment for new products, and additional service and warranty expenses. There can be no assurance that we will successfully develop and manufacture new products, or that new products introduced by us will be accepted in the marketplace. If we do not successfully introduce new products, our results of operations will be adversely affected.
Technology Of eBay
eBay Inc.’s platforms use a combination of proprietary technologies and services as well as technologies and services provided by others. We have developed intuitive user interfaces, buyer, seller and developer tools and transaction processing, database and network applications that help enable our users to reliably and securely complete transactions on our sites. Our technology infrastructure simplifies the storage and processing of large amounts of data, eases the deployment and operation of large-scale global products and services and automates much of the administration of large-scale clusters of computers. Our infrastructure has been designed around industry-standard architectures to reduce downtime in the event of outages or catastrophic occurrences. For information regarding technology-related risks, see the information in “Item 1A: Risk Factors” under the captions “Systems failures or cyberattacks and resulting interruptions in the availability of or degradation in the performance of our websites, applications, products or services could harm our business” and “Regulation in the areas of privacy and protection of user data could harm our business.” In support of our ongoing commitment to innovation and a better customer experience, we have been on a multi-year evolution to modernize our marketplace. Through technologies like artificial intelligence, which is woven into all aspects of the eBay marketplace, we are anticipating the needs of buyers, sellers and developers empowering entrepreneurs looking to grow their business, and making the platform more accessible to everyone. We aim to create highly personalized and inspiring shopping experiences powered by advanced technologies
Intellectual Property Of eBay
We regard the protection of our intellectual property, including our trademarks (particularly those covering the eBay name), patents, copyrights, domain names, trade dress and trade secrets as critical to our success. We aggressively protect our intellectual property rights by relying on federal, state and common law 5 rights in the U.S. and internationally, as well as a variety of administrative procedures. We also rely on contractual restrictions to protect our proprietary rights in products and services. We routinely enter into confidentiality and invention assignment agreements with our employees and contractors and nondisclosure agreements with parties with whom we conduct business to limit access to and disclosure of our proprietary information. We pursue the registration of our domain names, trademarks and service marks in the U.S. and internationally. Additionally, we have filed U.S. and international patent applications covering certain aspects of our proprietary technology. Effective trademark, copyright, patent, domain name, trade dress and trade secret protection is typically expensive to maintain and may require litigation. We must protect our intellectual property rights and other proprietary rights in an increasing number of jurisdictions, a process that is expensive and time consuming and may not be successful. We have registered our core brands as trademarks and domain names in the U.S. and a large number of other jurisdictions and have in place an active program to continue to secure trademarks and domain names that correspond to our brands in markets of interest. If we are unable to register or protect our trademarks or domain names, we could be adversely affected in any jurisdiction in which our trademarks or domain names are not registered or protected. We have licensed in the past, and expect to license in the future, certain of our proprietary rights, such as trademarks or copyrighted material, to others. From time to time, third parties have claimed—and others will likely claim in the future—that we have infringed their intellectual property rights. We are typically involved in a number of such legal proceedings at any time. Please see the information in “Item 3: Legal Proceedings” and in “Item 1A: Risk Factors” under the captions “The listing or sale by our users of items that allegedly infringe the intellectual property rights of rights owners, including pirated or counterfeit items, may harm our business,” and “We may be unable to adequately protect or enforce our intellectual property rights and face ongoing risk from patent litigation and allegations by third parties that we are infringing their intellectual property rights.”
Employees Of eBay
As of December 31, 2019, we employed approximately 13,300 people globally. Approximately 6,600 of our employees were located in the U.S.
eBay (EBAY) stock price chart over the last 5 years
The image below shows the stock price history of eBay (EBAY) over the last 5 years. And its been a very good time for the stock of eBay. Over the last 5 years the stock of eBay increased by a strong 139.4%.
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