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eBay Sellers' Boycott: Sound And Fury, Signifying a Strong 1Q

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eBay's [new strategy](/ec-news/article.php/3724546/A+Buyers+Market+at+eBay.htm) of doting on the buyers at the expense of, it seems to many, the sellers has made the e-commerce heavyweight a lot of enemies. Dissent among the power sellers has manifested in the form of a highly publicized boycott, and there's another one planned for May 1.

Citing independent tracking firms reporting double-digit listings declines, the sellers have claimed victory. A noisy flock of startups and niche players have been crowing about frustrated merchants who have abandoned eBay in favor of their own sites.

No doubt eBay has taken a PR hit on this one, but as a publicly traded company, it's got shareholders to satisfy. By the looks of a latest research note from analysts at Jeffries & Co., it's doing all right.

"eBay's February pricing tweaks are having positive effects on 1Q results," the analysts wrote, projecting listing growth that would translate into a 9 percent year-over-year revenue increase, toward the high end of its guidance. "We believe that the pricing tweaks on marketplaces are having the desired impact on listings growth."

The changes the analysts are referencing concern sellers' fees -- namely, that eBay has cut listing fees while raising commission fees, in effect moving the fees to the back end. Incoming CEO John Donahoe also announced that eBay will tweak its search algorithm tweaked to give sellers with the best feedback ratings higher page rankings. Of greatest pain was the news that sellers would no longer have a mechanism to leave negative feedback about buyers. That issue gets at the heart of what the strike is about: sellers' feeling like eBay is rolling over on them and pandering to the buyers.

It's a case of a large company placing its end-users' experience above that of its affiliates. It's also a symptom that eBay is growing up, and in so doing might no longer be the same whimsical free-for-all it was in the heady days of its steep ascent. eBay isn't turning its back on the sellers entirely, but it has determined that making its buyers happy is more important than coddling its sellers. We'll suspend judgment until the 1Q earnings call, but the Jeffries report gives the Donahoe strategy a healthy vote of confidence.

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