Will Ad Sales Add Up at eBay?
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Online auction goers can expect to see a few more ads on eBay pages, but don't look for ad sales to become a significant source of revenue for the company, analysts say.
eBay reportedly has a deal for the ad sales staff at American Online to sell some placements on its highly trafficked pages, but analysts are being quoted as saying that they don't expect ad revenue to climb to much more than 10 percent of income.
In fact, Salomon Smith Barney's Tim Albright told InternetNews.com that "advertising is less than 5 percent (of revenues) right now and if it could get into double digits as a percentage, that would be surprising They've always understated the opportunity there, and prefer to keep it as upside."
Meanwhile a Goldman Sachs Group analyst was quoted by The Wall Street Journal as saying that ad sales could one day amount to as much as 10 percent of its total revenue, which is expected to top $415 million this year.
eBay has experimented with advertising in the past, carrying ads from companies associated with it, such as Sun Microsystems Inc. and Keen.com Inc. However, less than 0.5 percent of eBay pages have carried ads until today, eBay spokesman Kevin Pursglove told the Journal.
"They [eBay] have some of the best inventory available," Albright said. "They need to be sensitive to the user experience. And they will, I imagine."