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Saturday
Mar142009

Ebay announces new plan for growth

As we've discussed before, Ebay is on a downward trend. The CEO John Donahue admitted as much the other day, saying "This business has continued to fall short of our expectations and customers' expectations."

With a new three-year revival plan, however, the e-commerce giant hopes to find its way up. Donahoe told Wall Street analysts that the company's greatest growth potential lies in its online payment unit, PayPal, and that it will need to re-evaluate how to integrate Skype into its business model (We're done apologizing for Skype"). There was no talk of the future of Microplace, a peer-to-peer microfinance platform owned by E-bay that offers an alternative to Kiva and the opportunity to earn interest on your investments.

Undoubtedly, the long-term opportunity for ecommerce is huge. Donahoe pointed out that e-commerce represents just 6% of real-world retail, but that it would rise to 15% or 20% in the next five years. The questions is whether Ebay is in any position to capture this growth or whether it will go mainly to better sites like Amazon.

In response to the CEO's announcement, the company's shares rose 4.8% to $11.63.

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