eBay to focus on secondary markets, revenue growth to lag ecommerce market in ‘09

eBay Chief Executive John Donahoe announced at their Analyst Day meeting that the company would focus on selling low-volume and liquidation products as it tranforms its marketplace business.  He said eBay is “not a retailer “, but instead a business intent on focusing on the global secondary marketplace.

He indicated that changing the business will take time, and that their revenues will grow more slowly than the ecommerce market in ‘09, track it in ‘10 and surpass it in ‘11.

He referred to PayPal as an important part of the business with huge potential.  But it’s eBay’s waning auction growth that is garnering the attention of investors.  Online shoppers are shifting away from auctions to fixed-price purchases on leading product sites like Amazon.com.   Donahoe countered that online auctions and fixed-price sales are simply “formats” that buyers can choose from, and that last year they launched various efforts to promote fixed-price transactions and acquire top sellers.

So far investors appear not to be biting, as eBay share prices are down two-thirds from their 52-week high.  Look for more changes from eBay over the coming months as they look to try and regain their old swagger.