Ebay a Bargain? I Don't Think So...

With Ebay taking a hit in price this year, you have to wonder if it can get back on track. I don't think so, as their core business growth is slowing, and there is no real word on what the strategy is for the long term. It would seem that their growth is based on raising user fees for listings, and the acquisition trail hasn't yielded the results expected. What does Ebay need to do?

First and foremost, Ebay has to improve the ecommerce participation rate amongst users. Although there is growth with businesses using ecommerce, there is still a largely untapped market of individual users out there that still are wary of ecommerce. If Ebay can make the big sell to these people, then things might get better for them over the short term. For the longer term, Ebay will have to come up with a better plan to improve growth.

Maybe Meg Whitman is out of steam on this one...I don't see the stock price beating the indices any time soon.

Options Backdating

Interesting article by CNN Money's Justin Fox on the subject of options backdating.

Japanese Auto Manufacturing Model - GM & Ford Take Note

I had this article from last week, with respect to auto manufacturing, and one of the reasons GM and Ford are failing. While it's not the biggest of their problems, it does hurt the bottom line. Improving their efficiency is a secondary issue to the main problems of supplying vehicles that the public want...and reliability. Instead of just closing plants to save dollars, the Big 3 should look to making improvements at the plants that are left. More cross-functional parts, and improving reliability are what will make the difference in their North American profitability in the future.

This is relevant now, because of the departure of Jerry York from GM's board last week. Now would be a good time to take some of your gains from GM.

Google & YouTube - Value?

I can't help but comment on the recent acquisition of YouTube by Google, with all the news these days. I can't understand why Google's price hasn't dropped with the all paper deal. The market seems to have a lot of faith in Google's plan for YouTube (which is yet to be revealed).

I don't think that the price was worth it, because of the nature of the content on YouTube. If Google expects to insert the ads into the videos for revenue, I don't think they will realize the gains warranted by the price paid. With Google involved with YouTube, I can see lawsuits popping up for copyright issues, now that there are deeper pockets associated with it.

Is there something else up Google's sleeve? Datamining is a possibility, to refine their ad targeting, but it still draws upon the current population of surfers to click on ads, and having a video attached, I don't think this will increase their click-through rate. Advertisers may end up paying more for better targeting, but I don't think the effectiveness of the ad-targeting refinement expected, will increase the revenue for the advertisers.

With the robustness of the stock price, I hope I am wrong, for all you individual investors. The scenario of paying too much won't play out for a few months yet.

If Google makes this work, Yahoo and Microsoft will definitely face an uphill battle for on-line ad dollars with their products.

More on Income Trusts

I came across this article that gives some more information on income trusts. Worth a read, in light of the recent move to income trusts in some companies.

Biggest finding out of the article is that the ratio of distributions paid to cash available for distributions, "has no relationship with the likelihood of cuts".

Pier 1 - Worth a Look?

With the housing market slowing down, now might be the time to look at companies that would benefit from people deciding to spruce up their existing homes, instead of buying a new house.

I came across this today, which was interesting, courtesy of CNN Money;

PIER ONE: CEO Marvin Girouard says he is stepping down. Not a moment too soon if you ask me. He's been The Man since 1999 and during his tenure, PIR (Charts) went way up and then way down. (From $25 to $7 over the past three years.) They had Kirstie Alley as a pitch person. Then one of the "Queer Eye" guys. They also tried a catalog. Most important though, the company's strategy of importing and selling trendy home furnishings had been copied by the likes of Target (Charts), Wal-Mart (Charts) and others, especially Bombay Company. Still, I think, this one might perk up, now that the big guy is on the way out.

If they could get it together and find something that the public will like, besides wicker furniture, there may be something that can be made...