Activist investor firm Starboard Value LP is a significant shareholder (over 1%) and apparently they’re not happy with how eBay has been managing their Classifieds component and think Marketplace fees should be slashed.
From The Wall Street Journal:
In a letter to eBay Chairman Thomas Tierney and interim Chief Executive Scott Schenkel that Starboard released Tuesday, the investor criticized what it said was eBay’s resistance to selling the classified business. Starboard said in many markets, eBay’s main marketplace and the classified unit compete for the same customers and product listings.
Roughly a year ago, Starboard called upon eBay to dump Classifieds and StubHub. eBay did the latter but kept Classifieds around. Now, Starboard is renewing its push for eBay to trim some fat and duplicate operations.
eBay Classifieds operates more like a regular newspaper classified ads section in that a seller creates a listing, but more of the exchange is directly between the seller and potential buyer.
With current-day eBay features, there’s little need for someone to create a Classifieds listing, and even doing so requires using eBay’s advanced listing form. The feature isn’t exposed right away to sellers in the first place.
Starboard also took issue with the current state of marketplace fees:
We also believe eBay should return to its roots in targeting its historical core buyer universe of ‘self-expressionists and treasure hunters,’ who are seeking unique, hard-to-find, or value-oriented items…(source)
It’s no secret that eBay has been raising fees over the last few years to keep profits coming in. Sellers have more choice when it comes to viable marketplaces on which to sell their wares, so it stands to reason that returning to a fee structure that makes eBay more competitive isn’t an entirely farfetched idea.
Our Board and management team have implemented changes based on investor input and have taken significant actions to deliver long-term shareholder value and strengthen the business. Through that lens, we will review Starboard’s letter and perspectives as we continue to rigorously review our business and opportunities for growth and value creation.
For those expecting a juicy reply, you’ll be disappointed. eBay’s response of “we’re doing some things” without outright acknowledging the points Starboard made is par for the course with a corporate response.