eBay’s amazing turnaround, and why CEO John Donahoe doesn’t like seeing Amazon boxes in the offices

John Donahue

High-ranking Microsoft execs like CEO Steve Ballmer bristle when they see employees carrying MacBooks or iPhones around the office. So, what’s the equivalent at e-commerce juggernaut eBay?

Well, you guessed it: Amazon.com boxes.

At least that’s how we’re interpreting a comment that eBay CEO John Donahoe made to employees at a recent gathering in Silicon Valley.

“I see competitors’ boxes coming to our mailroom,” said Donahoe, as reported in an in-depth profile on eBay in Fortune this month. “You should be using our products and using PayPal products wherever you see them.”

As Business Insider notes, Donahoe didn’t mention Amazon.com by name, but we’re assuming he was referring to the longtime rival.

The profile in Fortune by JP Mangalindan is definitely worth a read, showing how Donahoe has led eBay back to success. The stock is up 71 percent in the past 12 months — nearly on pace with Amazon’s meteoric 77 percent increase.

eBay is actually expanding rapidly in Amazon’s backyard, inking a lease for 53,000 square feet of space in Bellevue. The new office, led by Microsoft vet Ken Moss, is about double the size of the company’s existing footprint.

The Fortune report also points out how eBay is transforming itself into a provider of e-commerce tools and logistics, essentially becoming “the shopkeeper’s best answer to Amazon.” In other words, while Amazon is looking to dominate other retailers or compete alongside them, eBay wants to provide tools like PayPal to make existing retailers even better. Writes Mangalindan:

Amazon’s insatiable desire to dominate all of retailing proved to be an opportunity for eBay — a chance for the platform to become a sort of Switzerland of e-commerce, helping retailers fend off a common foe. “eBay wants to partner with the market sellers of the world, not put them out of business,” says Devin Wenig, president of Marketplaces. Indeed, eBay doesn’t compete directly with its retail partners — it isn’t peddling books and shoes and diapers alongside them.

  • Brent

    Yeah, maybe I’m dating myself but the concept of bringing your competitor’s product to work demonstrates a lack of confidence and pride to me. Not talking about product groups that needs to operationally because they support a competitor’s platform or groups buying competitors products to better understand their strengths and weaknesses – those all make sense to me. But if you’re an Ebayer ordering up Amazon stuff or a Microsofty rockin a Galaxy S3 at work, I don’t get it. But apparently times have changed.

    • Harkonnen

      I’ll agree that sporting a Mac while working at Microsoft is a punch in the eye, but eBay does not do what Amazon does so I think Donahoe needs to get over himself or expand the business model.

  • Gene K

    I understand what the CEO of eBay is ultimately aiming for, however, I believe leaving employees to naturally react to the free market keeps your edges that much sharper. I don’t intend to purchase CPG based on anyone else’s tastes while selecting B2B products based as much on politics as anything else. The reason for being, it keep you as an honest observer with fraction of cost per person. The market can only be changed when employee’s will is internally motivated by the company’s technology, culture and products and services, that’s where the wild fire starts. So to see your employee having a more keen eye towards another company’s brand is an opportunity to study who makes up this market and who understands them best. Otherwise we are creating bunch of sleeping sheep.

  • http://twitter.com/fijiaaron Aaron Evans

    ebay is still around?

  • Guest

    Having tunnel vision is a misguided approach for eBay. Banning Amazon parcels from eBay offices is an incredibly selfish thing to do. If I were running eBay, and next month I probably will be, I would encourage my employees to be customers not just of eBay but of e-commerce. Try everyone. What do certain companies do well? Where could eBay improve its experience? Without enough context about its customers and about its competitors, a company is ill-equipped to make decisions to keep it competitive.

  • Storyteller

    That might have been my first reaction, as well. Maybe there is something in-your-face about employees bringing your competitor’s product into your office. However, whenever you see that, you might ask yourself whether they bought at Amazon because of shopping experience, ease of finding products, better price, etc.

  • Patricia n.

    “amazing turnaround” you obviously have never sold a thing on Ebay. Ask the seller’s about this amazing turnaround LMAO

  • Patricia n.

    Any “competition” between Ebay and Amazon lives only in Donahue’s mind! They couldn’t be farther apart….in customer service, in pricing, in search, in availability of products, on and on….. I sell on both platforms and believe me, when I buy, I check Amazon first!

    • T.Powell

      I am with you on that , buy the way I found out that half.com does not have a direct Customer Service Number , everything is Via E-Mail they should post that! At the top of the website,I still like talking to humans even if there from overseas.

  • YaPiDo

    “You should be using our products and using PayPal products wherever you see them.”? No John, you should recognize that it means you’re failing. You might be able to twist an employee’s arm by being a control freak, but that will accelerate your losses in the Market.

  • Charles Steinmetz

    Ebay is a horrific experience as a seller. On top of that the fees they charge and the terrible seller support I hope Amazon eats their lunch.