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eBay's Whitman touts online storefronts

Chief Executive Meg Whitman says the online auction giant will soon open online storefronts as part of an effort to gain a greater share of retail sales.

SAN JOSE, Calif.--eBay Chief Executive Meg Whitman said the online auction giant will soon open online storefronts as part of an effort to gain a greater share of retail sales.

Speaking at the company's annual shareholder meeting, Whitman said the storefronts--where buyers can get goods at a fixed price without going through the bidding process--should launch sometime in the next quarter.

eBay has said for a while that it was considering offering storefronts, and sources outside the company told CNET News.com in April that the storefronts would be launched "soon."

Also at the meeting, Whitman said the company is positioning itself to reach its goal of $3 billion in revenue by 2005. To do that, sales will have to increase 50 percent annually over the next five years.

eBay has greatly expanded its global presence with the acquisition of iBazar, which eBay completed earlier this month, and its investment in South Korea's Internet Auction. Meanwhile, the company has added fixed-priced trading through its acquisition of Half.com and by allowing sellers to add a "buy it now" button to their auctions.

Whitman said the company plans to eventually roll Half.com into eBay. Maynard Webb, who heads eBay's information systems as president of eBay Technologies, said the process will be a gradual one. In the meantime, eBay will try to share features and technology with Half.com and plans to synchronize the feedback systems on the two sites.

"We will figure out how to migrate everything into one global platform," Webb said.

eBay spokesman Kevin Pursglove said the company plans to integrate Half.com into eBay's main site within the next two years. Integrating iBazar should take between six to nine months, he said.

Shareholders offered little criticism of the company in a question-and-answer session with Whitman. Despite a market downturn that has devastated the e-business sector, eBay's stock has remained relatively stable, closing Friday around the same price it did one year earlier. And unlike most e-commerce companies, which are under heavy pressure from investors to post profits, eBay has run consistently in the black for several quarters.

Tony Mezzapelle, a San Jose resident who is a professional investor and has owned eBay's stock for about three years, plans to continue to hold on to the stock and said the meeting offered few surprises. Mezzapelle said he wished Whitman would have spent more time talking about the success the company has had in making its computer systems more stable.

eBay suffered a rash of outages in 1999 that led the company to invest heavily in upgrading its infrastructure. The investments depressed the company's profits but have led to a more stable system in general.

Mezzapelle said he also wishes the company would give more information on its audience.

"They claim they have 29 million users," he said. "I'd like to know how active they are."

eBay spokesman Chris Donlay said the company's customer numbers include the total number of customers who have registered with eBay, no matter how active they've been in recent months. The number also includes customers of eBay's overseas sites, including those run by recently acquired iBazar, he said.

One shareholder asked Whitman about Butterfields, the high-end auction company eBay bought in 1999. Whitman said the unit is profitable and that listings have "grown nicely" at eBay Premier, the upscale online auction site that Butterfields anchors.

But Whitman acknowledged that there has been a "lot of transition" at Butterfields since eBay bought the company and said the company has been disappointed by the high-end market.

"The high-end market is much smaller than we thought," she said. "It's not as big as we initially thought it would be."

eBay Premier replaced eBay's Great Collections, which struggled to attract sellers. Last fall, Butterfields cut 15 percent of its staff in the second set of job cuts in six months. The company also ceased holding live auctions at its galleries in Chicago.