StumbleUpon was a bargain at $75 million and probably a worthwhile experiment for eBay, but now that eBay's future does not look as rosy as it once did, we think it only makes sense for eBay to sell it off again. According to TechCrunch, eBay has hired Deutsche Bank to find a buyer, though the asking price is not clear.

We contacted eBay about these rumors and will update this post once we get a response.

Skype?

It would be easy to draw parallels to eBay's acquisition of Skype, which eBay bought for the staggering amount of $2.6 billion. Skype, too, was never fully integrated into eBay's business model. However, as Peter Kafka notes, this extremely high purchase price also makes a sale very difficult now, unless eBay is willing to take a loss. Only a handful of companies are able to pay $3 billion or more, which leaves Google as one of the few potential candidates.

One of eBay's first partners to release a Selling Manager application - and a good example of the possibilities this platform provides - is UPS. Their WorldShip shipping software will be integrated directly within the eBay Selling Manager so sellers can manage shipments without having to leave eBay to do so. Other applications available at launch time include those from ecommerce developers Terapeak, HostedSupport, ahTEXT.com and Cloud Conversion.

Ebay's developer community, which includes some 87,000 members who have created over 13,500 applications, have been itching for a way to get better access to the 270,000 subscribers of eBay's Selling Manager service, an extra and formerly paid-access only area of eBay which many small-to-medium business sellers use. Now they can.

Why formerly paid? It seems that eBay wants to encourage sellers to check out these new offerings available within Selling Manager, so they're making the service free of charge. This is a win-win for all. Developers get greater access to sellers and sellers get access to better tools from the developers. 

The new Applications platform was built using theOpenSocial gadgets specification. Developers join the beta and begin developing their own apps by visiting http://developer.ebay.com/products/selling-manager-applications.

But what we've heard from sellers over the past couple of weeks doesn't lead us to believe that fancier selling tools will be enough to keep many of them on the site. What has sellers leaving the site is changes in policy that many sellers feel have negatively affected their ability to sell on the site, or unfairly given preferential treatment to corporate partners.

eBay has appeared to be taking steps over the past six months to transition the company toward an emphasis on fixed price selling over their traditional auction format. If sellers really are leaving the site, that spells trouble for eBay, where fewer seller options, no organized product reviews, and no "Amazon option" that offers free shipping means eBay will face difficulty attempting to compete seriously in the fixed price market.

While better integration of seller tools will certainly be a welcome change for many sellers, it by no means fixes the potentially major problem eBay is facing: the rift that has developed between management and top sellers on the site.

eBay Wiki is located at www.ebaywiki.com and the wiki topics are categorized and tagged. You must be logged in as an eBay member to edit a wiki page, which then presents you with an easy-to-use wysiwyg HTML editor. So no awful wiki syntax to learn!

Choosing topics/sub-topics and tags is very easy, as the following screenshot shows:

eBay Wiki also has article history and ratings, the editor's user details and seller/buyer ratings (i.e. their eBay reputation), RSS feeds and other easy-to-use social features.

So why did eBay choose to add a wiki? eBay has a buyer and seller community of more than 193 million members - a huge community that is thriving with conversations and activity. Their message boards get over 100,000 messages per week and eBay users are very knowledgeable on their topic niches. Having a Wiki on eBay will serve to refine and formalize the cream of the content in its user forums. It will also help eBay in the search engine rankings, as its user-generated content coffers will increase significantly over time!

Joe Kraus: it's a Wikipedia for eBay

In a Skype call, Joe Kraus described eBay Wiki to me as "a kind of Wikipedia for eBay and about eBay". He said its main focus is to give "tips and tricks on how to get the most out of eBay". The Wiki will complement and build on the eBay forums, in that the wiki will be a "single point of reference" on topics. 

Joe sees eBay Wiki as another step towards wikis coming of age and becoming mainstream. I agree, the use of wikis from one of the Internet's biggest consumer companies may be vital to their uptake outside of tech and enterprise circles. Joe said eBay will promote the Wiki as part of their community hub and eBay CEO Meg Whitman is announcing it in her keynote address at the eBay Live! user conference in Las Vegas today.

These problems were only compounded during the last year, as eBay also lost a lot of its casual sellers to Craigslist (which saw its traffic rise 40% over the past year).

As Compete's Matt Pace rightly points out, eBay's strategy of emphasizing fixed-price transactions only muddled the waters and blurred eBay's distinction from other online retailers, including eBay's own shopping.com. Also, users clearly prefer to buy from a trusted source like Amazon, and the average order value on eBay has remained stable at around $28 for the last year.

That doesn't mean that eBay's focus on "Buy-It-Now" transactions was a total failure, though. The number of these transactions grew steadily over the last year (up 20% from last year), but this was not enough to make up for the simultaneous decline in eBay's auction business. According to Compete, 1.5 million fewer users actually placed bids on eBay in February 2009 than a year ago.

The fact that eBay and Skype make strange bedfellows does not mean Skype doesn't have a business model. On the contrary, the business generated revenues of $551 million in 2008, which is a 44% increase year-over-year and represents a 21% profit margin for them. The press releases also states a projected revenue of $1 billion in 2011, twice as much as in 2008.

With promising sales, high adoption rates and an openness to new platforms such as their iPhone app, its not hard to think that Skype will have a booming IPO, and will remove the albatross status from eBay, which can return to its core strengths of online payments and e-commerce.

We've still yet to have these rumors confirmed, but what if eBay were to actually sell StumbleUpon? Help us predict whether eBay will sell the service by the end of this year and if so, the price tag that it might fetch.

• Reports claim that eBay is in touch with Deutsche Bank to find a buyer.
• eBay purchased StumbleUpon for $75 million 16 months ago.
• In July 2008, StumbleUpon had 1.3 million worldwide visitors, down from 4.4 million a year prior.

Stumble Upon Our Discussion

In addition to reading your predictions, we'd also like to know your thoughts on what this might mean for StumbleUpon community members. Here are some things to discuss in the comments section:

• Will StumbleUpon's growth continue to decrease if the rumors are true?
• If you're a StumbleUpon user, what are your thoughts on how the StumbleUpon community may be affected by a sell?
• If StumbleUpon doesn't sale, what do you think eBay will do with the service?

As Saul Hansell points out on the New York Times Bits blog, eBay is currently suffering from a major identity crisis. As we reported earlier this year, eBay's attempt to drive users away from auctions and towards fixed-price transactions ('Buy-it-Now') drove a lot of users away from the service, which, after all, used to be all about auctions. As Hansell rightly points out, a lot of this is meant to make users feel more secure about shopping at eBay, but at the same time, the company has also managed to annoy its traditional base of smaller sellers by focusing more on large retailers, while confusing users about what eBay really wants to be (auctions or Amazon competitor?).

Of course, it is also important to note that the current state of the economy also doesn't do eBay any favors. Consumer spending in general is down, and a lot of the items purchased on eBay were often collectibles and other items that were not necessities.

"What do Beanie Babies, Pez Dispensers and troubled Internet companies have in common? They're all for sale on eBay."

eBay has become known as a quick and easy way to sell your startup, should you need to. Techcrunch has a nice phrase for this - the "eBay exit". USAToday notes that "more than 10 dot-coms" have recently put themselves up for auction on eBay. The paper says that Search engine DigForIt.com sold for $25,400 this month and SynapseLife, an online calendar and organizational site which Techcrunch wrote about, sold for $60,000 (it opened at $50k). Also Read/WriteWeb covered the eBay sale of Talkr in February this year, which sold for $50k all up. There are many more instances of ebay exits we could list. And there are other places where startups can sell themselves too, like SitePoint Marketplace (Josh Catone noted in January that Blogster went that route).

Indeed USAToday also recounts the tale of CrispAds auction, which unsuccessfully tried to sell on eBay. It had a minimum price of $90,000, but ended up without any bids. According to USAToday, months later the company sold via a broker for "a few hundred thousand dollars".

If you're one of the many companies recently to have sold on eBay, let us know in the comments how you felt the process went. Should other entrepreneurs look to eBay, or is a private brokerage sale the best bet?

In addition to the feedback changes, the other items being protested include issues with DSRs (Detailed Seller Ratings), the minimum 21-Day PayPal hold for risky sellers and risky categories, fee increases, another other policy changes. A good summary of all the issues can be found here.

On eBay, there are several ongoing discussion threads surrounding the boycott, which began today. Some sellers are saying they won't boycott because they can't lose the business, but others say they won't just boycott, they will just take their business elsewhere for good.

Boycotters continue to use social media to spread their message - the unofficial MySpace page, for example, has 738 friends as of today. New YouTube videos have appeared as well.

It's too soon to tell whether this second boycott will have any impact on eBay either, but it may come down to whether eBay can withstand the loss of these major PowerSellers, rumored to be in the hundreds. With a site as massive as eBay, it's likely that they can.

"The Read/Write Web isn't just about being able to publish writing though, it is also about an increased ability for ordinary people to interact and transact with websites."

While researching something for a project I'm busy on currently, I came across a recent variation on this theme. Rummaging is a blog that is focused on the company eBay and the author made this excellent point:

"More and more, eBay is becoming a vehicle for people to express themselves about their relationships, their views about the world and all their hopes and fears.

[...]

Look at the international press attention gained by people selling their virginity, or a coke can, or an old wedding dress via an eBay auction. These people got to express themselves to a far wider audience than most can ever dream. Compare this to the criticism frequently levelled at weblogs: no-one reads them."

Note that I cut a few paragraphs to try and get to the essential point: which is that eBay, and other transactional community sites like it, is in a sense what the Read/Write Web means for the vast majority of people. Most people aren't bloggers - and probably never will be. But a huge number of people 'write' on interactive websites such as eBay (here in New Zealand the equivalent is TradeMe.co.nz, which gets as much attention in my country as eBay does in the US).

It's not just auction websites either - it can be any website that fosters a sense of community or interaction. And 'transactional' isn't necessarily about money.

As Rummaging concluded:

"eBay allows people their fifteen minutes in an explicitly transactional manner. In that, it epitomises the age."

Indeed it does - the age of the two-way, Read/Write Web.

Google has been using DomainKeys and Domain Keys Identified Mail since 2004 and both PayPal and eBay has been using it since October 2007. So far, however, Google did not completely block all suspicious emails in order to prevent too many false positives. Now, however, Google is taking a more radical stand and will reject any message that does not authenticate.

Google says it has been testing this for 'a few weeks now and it's working so well that few people really noticed.'

It is worth noting that Yahoo already announced a similar effort with eBay and PayPal last October.

As we noted today, a lot of spam and phishing scams are now also moving towards social networks. Just like with email, users there also have to become more educated about how to recognize potential scams, as technical solutions are frequently no match for the ingenious social engineering that is often at the core of these scams.

Ben whipped up bubbletwo recently and he describes it as a "Web 2.0 Instant Blogging Site". He's currently taking bids on eBay for sole rights to the app. He wrote on eBay:

"I'm selling bubbletwo.com. You will get full ownership of the domain name, the ruby on rails application that powers bubbletwo, all html, css and the database.

The site was released yesterday and has been visited by just under 200 users. Bubbletwo lets people create an instant blog. Its kind of similair to Shorttext or Writeboard.

If you win the auction (the reserve is just enough for me to buy a macbook pro and a 24" Dell monitor) I'll send you an agreement to transfer over the IP. I will also help you move bubbletwo over to your own colocated server (I use layeredtech.com for my hosting). After that - you're on your own.

I expect that with a decent amount of promotion and a little luck - you could earn back the reserve price within a year using Google Ads."

Now in the interests of full disclosure I have to admit I have something to gain if Ben is successful. If he manages to sell his app on eBay, then I get his old Mac mini :-) I'm easily bribed, as you can see :-) But also I like promoting my fellow Wellingtonians. Go Ben!

Final Value Fees

While the listing fees have been reduced substantially, the overall fees for a listing still includes what eBay calls a 'final value fee,' which is determined by the sales price of the item to be sold. These fees have been simplified, but also increased. Overall, however, this change in eBay's pricing structure could result in substantially lower cost for a lot of eBay's sellers.

Consumers Don't Want Auctions

As Laurie J. Flynn in the New York Times points out, these changes are also driven by a change in consumer behavior online. There is simply less interest in the auction model these days, which, even though it might be very exciting, just isn't as convenient as just heading over to Amazon and buying a product right away.

And Amazon is exactly the company that eBay should fear the most. For consumers buying anything on Amazon is easier (and often cheaper) than going to eBay - and it isn't loaded with the same potential for fraud. Amazon is also constantly making it easier for sellers to list their items in its database.

Buy.com, a traditional fixed-price online retailer in the vein of Amazon, signed a listing deal with eBay in May. The terms of the deal have not been disclosed, but Buy.com is generally listing around 500,000 items on the site at once -- or are they? Sellers on eBay's forums discovered that a number of the company's listings appear to be empty.

The listings appear in searches labeled as just "NEW." Clicking through displays listings pages that inform users they are bidding on "a brand new item," with no indication of what that item actually is.

This is important for two reasons. First, because it means that Buy.com is being given preferential treatment over individual sellers -- who would not be allowed to create empty listings to flood category search results with their brand. Sellers in the areas were Buy.com sells are feeling increasing competitive pressure -- and this indicates that the playing field is not level. As the auction-watching blog AuctionBytes indicates, that goes against what former eBay CEO Meg Whitman promised sellers.

The second reason this matters is that the number of new listings on the site is a key metric that eBay reports to shareholders in their financial reports. If those numbers are being artificially inflated with empty listings it could indicate that information being fed to investors is not accurate.