Thursday, October 16, 2008

Bring Back the Old Ebay

Ebay reported September quarter earnings last night, which were bad. Ebay is not a small company any more. Its $14 billion of gross merchandise volume is larger than both Starbucks and Nortel's revenue. Business slowed down across the board in mid-August and the company will be laying off 10% of their workforce. They are unlikely to grow their way out of this problem.

Ebay's core markets seem to be saturated and now the struggle begins to balance growth or no growth with cash flow. The economy is slowing down in a hurry so it's not all Ebay's doing, but it's not going to get easier any time soon.

Down is bad.

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