Analysts Believe eBay's Express Launched to Compete in Auction, Shopping Space

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EBay's quiet launch of its first fixed-price shopping site earlier this week will help it better compete with online shopping sites and new players in the space such as Google Base, e-commerce analysts told DM News.

eBay, San Jose, said eBay Express allows shoppers to buy products at fixed prices from qualified eBay merchants. "eBay Express is for buyers who prefer a more conventional online shopping experience," said Bill Cobb, president, eBay North America.

The site will be in a "preview" phase for several weeks while the company gathers feedback and makes changes to the service.

Analysts say eBay is debuting Express to fend off growing competition from new players in the auction space, particularly Goggle's online classifieds service, Google Base, and existing shopping sites like Amazon.

"It comes at a time when eBay is having difficulty growing its revenue...and when Google Base is moving into its space," said Jeffrey Grau, senior analyst, online marketing research firm eMarketer, New York.

While eBay's first quarter net revenues grew 35 percent to $1.39 billion, the auction site is "not seeing the kind of growth they were", Mr. Grau added.

Both Grau and Vikrahm Sehgal, research director and senior analyst, JupiterResearch, New York, believe Express will help eBay add incremental revenue.

"It is their strategy to gain incremental users who are wary of the auction environment. The look and feel [of Express] from a consumer's point of view would be like they are at any other retailer," Mr. Sehgal said.

eBay Express includes an online shopping cart -- a first for eBay -- and buyers can choose to pay with PayPal or a credit card, which also differs from eBay's auction site, which accepts PayPal.

Still, analysts expect eBay to continue to focus on its traditional auction model in the near future.

"They're not going to give up their auction environment: that truly is their bread and butter," Mr. Sehgal said.

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