With eBay’s Earnings on Tap, Its Data Breach and SEO Penalty Loom Large
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May was a very bad month for eBay. Next week we’ll see just how bad it was.
On Wednesday, eBay will report financial results for the second quarter. Analysts are expecting average earnings of 68 cents per share, excluding some items, on $4.38 billion in revenue. But the combination of two negative events that occurred halfway through the quarter could mean eBay’s results come in below those estimates.
First, the company announced on May 21 that hackers had broken into its networks and made off with personal information for up to 145 million eBay shoppers. While payment information was not compromised, other information (such as login names and encrypted passwords) were, so eBay required all of its users to change their passwords.
A few days later, Re/code and others reported that Google had penalized eBay for some search engine optimization tactics, resulting in eBay’s visibility in organic search results dropping by as much as 50 percent, according to reports.
Analyst research notes haven’t really started trickling out yet, so it’s a bit early to get their take. But recent data from e-commerce software company ChannelAdvisor provides some clues. ChannelAdvisor is a publicly traded company that helps manufacturers and brands sell their wares across online marketplaces, including Amazon and eBay.
In May, ChannelAdvisor sellers saw their sales via eBay rise 11.5 percent from the same period the previous year. That was down from a 14 percent increase in April, providing a subtle suggestion that the hack and SEO hit might be having an impact. But in June, that stat rose slightly to 12.3 percent, suggesting, according to ChannelAdvisor CEO Scot Wingo “that eBay started to recover from the double whammy of the data breach and Google … problems from May.”
That’s one data point, but a potentially telling one. Next week we’ll get more.