A new report shows Wall Street continues to buy what eBay is selling when it comes to the marketplaces business, even as the parent organzation splinters. A report from Citi Research approves of the new eBay Marketplace management strategy of focusing on core merchants and its approach to battling a severe deterioration in search engine exposure.
“Management has stated their intentions of focusing eBay on its core set of customers and sellers, offering unique, hard to find products while sourcing from small-to-mid sized merchants and sellers, who make up 70% of the global market,” wrote the Citi analysts, who said that could result in improved growth.
Having said that about unique items, the Citi analysts went on to say they liked the new catalog approach, which applies to commodity items. Requiring product identifiers such as Manufacturer Part Number and Global Trade Item Number will help eBay engineer product listings with greater search engine equity, “which will ultimately help mitigate the impacts of search engine algo changes (such as Google Panda’s changes last year) on new customer acquisition.”
The current head of eBay Marketplaces Devin Wenig will take over as CEO of the much smaller “eBay” after it breaks up with PayPal and sells or spins off eBay Enterprise. He has signaled his intention to make changes to the site, including vital areas such as search and feedback.
The analysts also approve of the possible acquisition of eBay by another company, writing, “Another longer term catalyst could be that eBay might emerge as an M&A target considering scaled ecommerce platform (over $83bn in worldwide GMV in 2014) and sustained brand recognition around the globe.”
eBay could attract “potentially a number of suitors” – including those looking to bolster their position in the ecommerce space as well as private investors. That said, the Citi analysts would be fine if eBay was not acquired, viewing it as “an attractive standalone investment” as well.
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