Activist investor Carl Icahn forced eBay to split with PayPal in July 2015, but in a survey conducted last month, a majority of sellers said they were not better off as a result of the breakup.
EcommerceBytes conducted the survey after another activist investor, Elliott Management, approached eBay’s Board of Directors on January 22, 2019, and recommended actions eBay should take to become a “better and more valuable company,” including considering selling off some subsidiaries.
In last month’s survey, we asked sellers: “Activist investor Carl Icahn forced eBay to split with PayPal in July 2015. As a seller, are you better off today as a result of eBay’s split with PayPal?”
Only 14% said they were better off, while 65% said they were not better off. A surprising number said they didn’t know (21%).
We then asked sellers about Elliott’s recommendation that eBay consider selling two subsidiaries. We prefaced the questions with the following: “In its letter to the eBay Board of Directors on Jan. 22, 2019, activist investor Elliott Management said it believes eBay should review its portfolio of companies and strongly consider selling StubHub and eBay Classifieds Group,” and then asked:
“Do you think eBay should sell its ticket marketplace Stubhub?”
Yes: 59%
No: 10.5%
Don’t Know: 30.5%
And, “Do you think eBay should sell its classifieds business (eBay Classifieds Group)?”
Yes: 54%
No: 13%
Don’t Know: 33%
Thoughts on the 2015 eBay-PayPal Split
Some sellers said the eBay-PayPal split had no impact on their business. And as we noted above, a good number of sellers just weren’t sure if they were better off or not as a result of the split. One seller said they weren’t sure if the problems they now encounter were caused by the split: “As a smaller seller ($50,000-$100,000/year) in sales, my biggest issues are all the software glitches, benefits taken away from sellers, etc. How much was impacted by the breakup I don’t know.”
Some sellers said the split made claims and customer service more difficult:
- “The split of PayPal and eBay did nothing to help our eBay business. In fact, it made things more complicated. Before eBay customer service could look at PayPal and eBay and resolve issues. Not so anymore.”
- “Since they split there’s zero communication between the companies and it’s led to several problems for me as a seller when it comes to disputes and claims by buyers.”
- “It’s makes selling more difficult because they just toss you back and forth between each other when there is a problem and the seller gets screwed every time.”
Some sellers were also concerned about eBay’s decision to roll out its own Managed Payments offering rather than having PayPal handle its payment platform.
- “PayPal makes it easy for me. I do not want to have to wait for my money, and I want to purchase inventory with my PayPal account only.”
- “With PayPal, sellers get their money quicker instead of eBay enjoying the float on sellers’ money.”
- “Because when eBay takes over payments in July of 2019 they will surely mess it up beyond belief.”
Thoughts about eBay Selling Stubhub
The issue of whether eBay should sell StubHub seemed to come down to whether the ticket marketplace was contributing revenue or whether it was a distraction.
- “You can’t be everything to everybody. eBay needs to stay focused on their bread and butter and realize eBay is a 3rd party and not an employer to eBay sellers.”
- “No, it needs all the income it can get. If it isn’t getting anything from StubHub, it’s going to get it from sellers.”
- “It creates more value for investors but takes away value from eBay making it a weaker company.”
- “eBay should concentrate on its original mission.”
- “Stubhub is more profitable than marketplace. If eBay wants to stay independent it should keep Stubhub.”
- “I have no dealings with Stubhub, but if it would help focus on the core business and all the problems, then yes, remove it from the picture.”
- “Why sell something that’s so profitable?”
- “Selling StubHub and Classified will provide cash to invest in the Marketplace. It will also allow management and the Board to focus on eBay’s core business. In addition to selling these two units, there also needs to be new management and a new Board.”
One seller thought outside the box: “It needs to be better integrated to the eBay website, maybe as eBay motors is- separate but easily accessible.”
Thoughts about eBay Selling eBay Classifieds
Some of the comments echoed those above regarding StubHub – keep it for the revenue, or dump it if it’s a distraction from the core marketplace.
However, it also appeared from seller comments that many were speaking from their own experience in the US where eBay doesn’t have a major classifieds presence compared to internationally where it has some big names, including Kijiji, Gumtree, and others.
We asked sellers additional questions about what they thought of Elliott’s suggestions to eBay, look for Part 2 of the survey results coming up (now available).
In the meantime, let us know what you think of the results so far on the EcommerceBytes Blog.
