The Web's largest auctioneer is revamping page designs, overhauling search functions and launching new services that bear a strong resemblance to features that work well at Amazon, the Internet's biggest retailer. To be sure, this is no casual face-lift for eBay.
For more than 10 years, eBay, with its fat margins and zealous user base, has been the dominant force in the battle between the two e-commerce superpowers. Currently, however, the momentum appears to be with Amazon.
Wall Street has rewarded Amazon for its ease of use, growing selection, low prices and success at persuading greater numbers of merchants to sell goods on its site. By comparison, some say eBay looks frumpy, with its helter-skelter search results and cluttered product pages. Sure,has seen sharp growth from two significant units--payment service PayPal and Internet Skype--but investors are showing signs of wariness that Amazon may be eating into eBay's market share.
"E-commerce is growing at 20 percent," said Scot Wingo, CEO of ChannelAdvisor, which sells e-commerce software tools to small and medium-size businesses. "Amazon is growing at 30 percent. What everyone wants to know is why eBay is failing to keep pace with e-commerce?"
Here are the metrics that disturb most eBay watchers. Growth in gross merchandise volume (GMV), a marquee metric in measuring eBay's health, is slowing, while listings are in decline. For the quarter that ended June 30, eBay reported worldwide listings fell 6 percent and GMV grew 12 percent to $14.46 billion, compared with growth of 18 percent in the same period a year earlier.
The company has tried to explain that listings no longer have the same relevance as the company has diversified.
"What we said about the second quarter was that we were really pleased with our growth," said Hani Durzy, eBay's spokesman. "The second quarter was a good one."
The company saw profits for that quarter shoot up 50 percent to $375 million, and revenue increased 30 percent. Nonetheless, eBay's message has been met with mostly skepticism.
Amazon's shares as of Friday afternoon were trading at around $78, while eBay was at around $34. Since March, Amazon's share price has risen 50 percent, while eBay's has risen 13 percent. Wall Street is convinced that the buying experience at eBay is broken, and the message to CEO Meg Whitman is clear: fix the bread-and-butter part of your business.
And that's likely why visitors to eBay have seen a new, less-cluttered home page recently and a service that allows buyers to bid on several items at the same time. Another feature lets consumers track eBay auctions while logged in at other Web sites.
Meanwhile, eBay's engineers continue to tinker. The company has quietly tested new product pages, search features and product displays with a look and feel that is unmistakably Amazon.
For example, eBay is experimenting with a new, smarter search. Key the words "Nikon D40" into eBay's traditional search, for instance, and the results page shows an 18-55mm lens at the top, followed by three cameras, another lens, a reversing ring for the lens and later a camera bag.
But earlier this week, a search for the Nikon D40 returned a page with two photos of different models of the camera. (The search pages aren't showing currently, since they're only now being tested.) The pictures were much larger than the thumbnails typically found in eBay's results. Below the photos were ratings of the cameras, links to customer reviews, and the range of prices.
Wingo said that eBay's search retrieves scads of items that are only peripherally related to a product, and that the company is working on narrowing its searches.
Someone entering "Nikon D40" into a search field is likely looking for the camera and not a lens cap, according to Wingo.
"They are trying to parse their findings," Wingo said. "When someone punches in 'Nike, blue, size 10,' the search will know that Nike is a brand, blue is a color and 10 is a size. This will lead to a much cleaner result."
Product pages could see big changes. Soon, eBay will offer customers photos to enable them to see a product from multiple angles, something it does not do now.
Further down the page are tabs labeled Overview, Listings, Reviews--similar to what Amazon shows on a Nikon search: a single large photo is posted to the page and underneath are images of the camera from different angles.
This is followed by technical and product details and descriptions, as well as a listing of products that other customers have bought after purchasing the camera.
"These features have existed on the site, but never in an aggregated or simple way to find," Wingo said. "This is a much more Amazon way of buying."
Sean Ditterle agrees. After reviewing some of eBay's tests, the auditor from San Francisco who looks for deals on eBay about four times a week, welcomed the upgrades.
"The search takes you to where you want to go quicker," said Ditterle, 25.
eBay is after what Amazon has succeeded in doing for years now: SKU authority. SKU stands for stock-keeping unit, a numbered system that retailers have used for decades to keep track of inventory.
Amazon has done a good job of cataloging the goods it sells, Wingo said. But eBay faces a much harder challenge in this regard, according to Durzy.
"The technical challenge that we face to help people find things is we have a much larger offering," Durzy said. "At any given time there are 100 million items on eBay. There are a lot of things that you can't find anywhere else and there's not a catalog or SKUs offered by our customers. The product names are whatever millions of people want to call them."
Durzy denied that eBay used Amazon's design as a model for its redesign. Presumably, investors won't care where eBay got the inspiration. They just want the features to work.
Said Durzy: "The most important thing for us is to focus on improving the buyer experience and increase engagement on the site, encourage return visits and help them find the things they are look for...all this is paramount for us."