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EBay Inc plans to cut its work force 10 percent and sees third-quarter revenue hitting the low end of its forecast, though profit will exceed expectations, the online auction Web site said on Monday.
EBay also said it would spend more than $1.3 billion to buy companies that bolster its online payments and classifieds businesses as it seeks to improve its performance in a weak U.S. economy.
Its shares fell 2.6 percent in premarket trading after rising as much as 2 percent immediately after the announcement.
EBay, which has faced slower growth in its core auction business over the last few years, said it will buy the Bill Me Later payments service for about $820 million in cash and $125 million in options. The business offers consumers deferred payments and financing promotions.
Personally, I am surprised that they had so many employees - around 10,000 for a company that does not seem too involved with the service they offer online.
Good point. They seem to run such a low-over head business... What the heck are all those 10,000 employees doing? Definitely not working in customer service. They don't ship products, they don't manage inventory...
Google at least comes out with totally new services and products consistently throughout the years... eBay pretty much flies the same ship it was flying 5 years ago... Yeah they change their fee structure every now and then... or their review system... but have they really done anything innovative in years?
Maybe I'm just not very well read on the topic, but I can't recall any major strides in technology or innovation... Oh they brought their affiliate program in-house... but nothing innovative there.
Sounds like the layoff is a good move... unfortunately.
I also have a hard time understanding what they do with 10k people.... well I guess 9,000 now. Seems like it could be run by 100 or so talented folks. There must be a lot more to it than meets the eye. Maybe 8,500 of those people go around to artificially inflate bid prices. (KIDDING!)
Is there something unique this company has to ensure the loans they make perform?
I'd say it would have to be either luck or the U.S. Gov't. Maybe a great insurance policy from AIG? (man am I cynical this morning...)
Bill Me Later seems like an accounts receivable factoring firm. However, factoring usually has a solid contract to ensure payment. I don't have an interest in signing up for an account to verify, but my guess is you probably link your Bill Me Later account to a credit card or offer some sort of collateral, most likely in the fine print, to mitigate their risk.
"Bill me later" what a rubbish idea to base a business on - what happens to cash flow - you buy it you pay for it - another here today gone tomorrow web service that sounds great until bills need paying on time.
As a vendor, why would I care about any of that?
Bill Me Later and their underwriters are responsible for ensuring that they don't give credit to poor risks and they take the bath if they choose poorly.
In return, they deduct a transaction fee on the sale.