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eBay CEO: 'We're Not Amazon'

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While Amazon's stock price has risen 41 percent over the past two years, eBay's has lost more than 50 percent of its value -- a fact that hasn't gone overlooked by its shareholders.

But speaking today during its annual shareholder meeting, eBay (NASDAQ: EBAY) CEO John Donahoe downplayed the comparison, saying that eBay has to factor in the needs of its seller community, unlike its e-commerce rival.

"We're not trying to be Amazon, just as Amazon isn't trying to be eBay," he said. "We have to make changes within the context of a buyer-seller community."

Keeping sellers happy is an especially sensitive issue for eBay. The company's efforts to shore up its business last year hit some turbulence as fee and feedback policy changes prompted outrage within the seller community, resulting in widespread boycotts and some online merchants vowing to defect to smaller startup marketplaces.

But during yesterday's shareholder meeting, eBay executives faced questions about whether it had acted too slowly in implementing necessary changes to reverse the stock's decline.

"Our challenge is that we're a marketplace model and we are deeply committed to that -- we're not retail," Donahoe said. "So on the one hand, analysts ask why we aren't changing fast enough, but the fact is we're sensitive to our sellers' needs, and they say we've been too aggressive and too fast, so we try to strike a balance."

"In 2008, we instituted incremental changes to make the experience safer and easier, in the interim, the competition moved faster, so 18 months ago our user experience had to catch up. That meant making not incremental, but fundamental changes -- that meant making controversial changes to feedback, pricing, search.

The news continues efforts by eBay execs to distance their company from Amazon (NASDAQ: AMZN), by saying that the two are fundamentally different businesses: eBay includes a mix of liquidation, collectibles and flea market-type wares based on a tight seller community, while individual sellers have less of a direct role in Amazon's model.

But eBay executives are still under the gun to prove their model can work -- especially after posting fourth-quarter results that included a 31 percent decline in revenue -- its first year-to-year drop in revenue.

Making matters worse is that Amazon (NASDAQ: AMZN) reported total sales of $4.89 billion, up 18 percent from the first quarter in 2008 and ahead of Wall Street estimates.

The continued problems have industry watchers wondering whether the company's on the correct track.

[cob:Special_Report]"I think Donahoe got it right, in terms of sellers saying, 'Stop, it's too much, too fast,'" Ina Steiner, editor of AuctionBytes.com, told InternetNews.com. "That's absolutely correct."

"But the real question is if the stock is down, are the changes being made the right changes?" she added. "I was surprised given the results of Q4 and Q1 that instead of saying, 'Sure, you're going in the right direction, just not fast enough,' that someone didn't ask if it was the right approach."

For now, the company is forging ahead with a plan of action laid out during the eBay analysts briefing a month ago. According to that plan, the company expects to continue pushing its PayPal unit as the global leader in online payments, while its Skype Internet telephony unit will be spun off, potentially through an IPO.

Meanwhile, eBay's core marketplace will continue shifting to become a more diversified e-commerce platform focusing on liquidation items, Donahoe said today.