Australian eBayers are up in arms over a new policy by the company to accept only PayPal as payment for online auctions. The fact that eBay owns PayPal is causing critics to charge a conflict of interest, and the new rule is being widely protested by professional eBay sellers in Australia.
eBay seems to be experimenting with the PayPal-only policy, and company representatives have admitted that if all goes well in Australia, eBay may become PayPal-only in larger markets like the European Union and the United States. But Australian eBayers are saying “not so fast!”
The biggest reason for the outrage amongst Australian eBay users is simply…price. The most common method of payment and Australia is by direct bank transfer. Australian banks routinely charge approximately $.20 US per transfer, regardless of the amount of money being paid. Compare that to PayPal’s rates, which can be as high as 4.4% of the total purchase price in Australia. This means that selling a more expensive item incurs a much higher money transfer fee through PayPal than by ordinary bank transfer.
In Europe as well, the direct bank transfer (or bank gyro) is the most common method of payment for goods and services. It’s not surprising then, that Europeans are watching closely to see how eBay’s PayPal-only rule plays out in Australia.
The fact that eBay owns PayPal out right is causing many to see a conflict of interest in the policy, and to suggest that the company is trying to set up a monopoly to increase their bottom line. eBay defends this charge by suggesting that PayPal payments are safer, and help the company reduce the risk of fraud and abuse in the system.
Overall though, it seems that many economists and financial experts (as well as eBay power sellers) are not buying this argument, noting that both credit cards and bank transfers also have significant fraud protection in place. There’s also no denying that eBay stands to profit from the PayPal-only rule, and even the Australian Competition and Consumer Commission is investigating the new policy, and could potentially revoke eBay’s anti-trade immunity if it finds a conflict of interest, or decides that the new policy disrupts normal competition in the marketplace.
This is not the first time in eBay has found itself in hot water over free trade practices, or with its professional sellers. In fact, the company has been progressively alienating many eBayers over the last several years; first by raising their sellers fees, then by charging additional fees for photo hosting, and now by cutting into its seller’s bottom line by insisting on PayPal-only payments for online auctions.
If this trend continues, eBay may find many of its biggest sellers opting out altogether. Because while eBay is certainly the largest online auction site in the United States — and in most countries where it competes — it is by no means the only online auction service. The company would do well to remember that it is their power sellers that actually bring in the income, and they have made eBay the profitable corporation is today.
If you’ve watched the network and cable news at all over the past few months, you might be forgiven for thinking that “the sky is falling” when it comes to the US economy. News anchors, journalists and pundits have been talking “recession” nearly nonstop recently, but surprisingly, many indicators suggest that the US economy is more resilient than we’ve been led to believe by the 24 hour news networks.
Consider the recent indicators from the US service sector, which show that the sector expanded in April from 49.6% to 52%, beating the predictions of both pundits and economists. Overall, the US service sector represents about 70% of the American economy, so it is obviously a very good indicator of the overall state of the US economy.
In addition, employment and manufacturing indexes for the first quarter of 2008 also showed better than expected numbers — further evidence that the US economy could rebound quicker than predicted by many economists.
While the US economy may (or may not) be in a recession, the new service sector reports and other indicators suggest that things may not be as dire as the news media would have you believe. Even the US dollar, which has been at all-time lows against many currencies over the past six months, has shown slight gains in the past few weeks.
Also, on Friday the US jobs report was released for the first sector of 2008. The report showed that US hiring was surprisingly strong, considering the relative economic slowdown over the past two quarters. In fact, the recent employment report posted the highest numbers since December of 2007, and suggests that business services employment is also more robust than most pundits had predicted.
The jobs report lends significant credibility to the US service sector report, indicating that even though the US economy is in a bit of a slump at the moment, things are definitely not spiraling out of control, as has been reported by some cable news networks.
On the downside, the business activity index fell 1.3 points in the first quarter of 2008, suggesting that new businesses, especially, are still in a slump. Overall, the economic indicators are somewhat mixed, but there are enough positive trends to suggest that the economy could rebound by the fourth quarter of 2008, or possibly even sooner.
The great moral of all this is this: the US economy may be in a slump for the time being — but it is certainly not in a recessionary tailspin.
InformationWeek.com is reporting that T-Mobile finally announced that its long-awaited 3G mobile network was up and running as of last week. T-Mobile customers have been waiting patiently for nearly 2 years for the arrival of the new high-speed mobile Internet-ready 3G network.
The company’s biggest competitors, AT&T, Verizon, and Sprint, have already been offering high-speed 3G data networks to their customers for years, leaving T-Mobile trailing behind in the race for high-speed mobile Internet service. Now that T-Mobile has finally caught up with the competition (at least when it comes to mobile Internet performance), the network’s customers should be setting on easy street, right? Not so fast…
Despite the fact that T-Mobile now has its very own 3G data network in place, the company has almost no 3G-ready mobile phones to take advantage of the new network. At present, they have only four models that can access the new high-speed network, and unfortunately, none of the four are real standouts.
Conventional wisdom dictates that T-Mobile should have introduced the new high-speed data network with the launch of a drop-dead, must-have smartphone. Debuting the network with a flashy new phone that can take full advantage of it would have been a smart marketing decision for T-Mobile. But instead, the company’s big announcement received very little fanfare, and even less free publicity in the media last week.
But while T-Mobile’s marketing efforts may have been highly flawed in debuting the new network, at least they now have the 3G high speed data access available, right? Well, not exactly.
T-Mobile is rolling out the 3G network gradually. According to company representatives, it is now in place only in New York City, and the company claims they will continue to expand the network throughout the year so that it covers “most” of the T-Mobile network by the end of 2008.
Now if the company could just introduce a new line of flashy and sophisticated smartphones to take advantage of their gradually expanding 3G network, consumers might just set up and take notice. Something along the lines of the Apple iPhone — or at least in the same general ballpark — should do the trick.
As it is though, by gradually introducing the new 3G network throughout the country over many months, and failing to have attractive new phones available to take advantage of it, T-Mobile may find it difficult to attract new customers or win over “converts” from AT&T or Verizon.
Steve Ballmer, the CEO of Microsoft, has announced that his company has retracted its offer to buy out the struggling Yahoo.com in a multibillion-dollar stock offer. The retraction surprised many, considering that Mr. Ballmer had once called the Yahoo deal “crucial to the future of Microsoft.”
Meanwhile, Yahoo’s stock declined sharply on news of the Microsoft withdrawal, leaving shareholders wondering if the Yahoo overplayed its hand. Microsoft had offered $31 per share for Yahoo, a significant increase over the stock’s traded price, and a price-per-share not likely to be seen again for some time (if at all).
The New York Times is reporting that Mr. Ballmer even sent a courteous thank you note to Yahoo CEO Jerry Yang to convey his “personal thanks” for considering the Microsoft buyout offer. While this was obviously a very civil and gentlemanly thing to do, many Wall Street analysts are expressing concern that Ballmer may not have the “killer instinct” to push through aggressive deals like the proposed Yahoo buyout.
For now, Yahoo appears to be the loser in the transaction, but writing for the New York Times, Andrew Ross Sorkin points out that Microsoft has also been dealt a serious blow by their failure to aggressively pursue the Yahoo deal. Sorkin suggests that Mr. Ballmer “waffled” when Yahoo CEO Jerry Yang refused to simply cave in to Microsoft’s demands.
Microsoft, on the other hand, claims that the buyout withdrawal was a sign of Microsoft’s fiscal discipline and self-control. But there is no denying that some on Wall Street also view it as a sign of weakness and indecisiveness. Many believe Mr. Ballmer also failed to consider the opinions of Microsoft’s biggest shareholders before instigating the Yahoo buyout deal in the first place.
Most of the major Microsoft stockholders were opposed to the Yahoo deal. A fact that eventually led to Microsoft’s stock being diminished as well. The New York Times reports that Microsoft stock has lost $24 billion in overall value since the announcement of the Yahoo buyout offer.
Ballmer’s credibility as Microsoft CEO has also been significantly damaged by the failure of the Yahoo bid. At one point, he promised to take the bid directly to Yahoo shareholders if the Yahoo board failed to reach an agreement on the offer within three weeks. But then, inexplicably, he allowed the three-week deadline to pass without saying a thing.
The failed Microsoft-Yahoo deal shows that in corporate takeovers, even the losing party can come away looking like a winner — and vice versa.
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The “Cult of Apple” seems to be growing exponentially these days. The company is riding high on the success of the iPod, the iPhone, and the reputation that their personal computers have for reliability and ease of use. Now Apple can add another feather to its cap: best customer support.
Consumer Reports National Research Center released the results of its annual tech support survey Monday. The report reveals that only 60% of customers’ technical problems are successfully resolved by customer support representatives, showing that there is vast room for improvement in the tech support divisions of most computer retailers.
Interestingly, laptop users reported more problems than desktop computer customers. On average, a full 40% of laptops have to be repaired within three years of purchase — and in some cases, even need to be replaced. To put that into context, consider the report’s findings that only 10% of digital cameras require repairs within the same three-year period.
But even though the tech support industry in general scored low marks on the annual report, Apple’s customer service ranked quite high. In fact, Apple tech support successfully solved customer’s problems in more than 80% of the cases reported during the last year, the highest success ratio in the business.
Specifically, Apple scored 83 out of 100 for its tech support of laptops, and 81 out of 100 for desktop support. Other big-name PC manufacturers didn’t do nearly as well, including Hewlett-Packard, Dell and Sony. For example, Dell’s customer service rated 60 on laptop computers (compared to Apple’s 83).
Companies like Hewlett-Packard and Compaq scored the lowest among the major computer manufacturers, with Compaq scoring an abysmal 47 points for its tech support of desktop computers.
Although Apple computers are generally more expensive than their PC counterparts, the consumer reports survey (and others like it) lend credence to the idea that Mac computers are worth the extra money. Especially when you consider that the instance of computer viruses for Apple computers is very low, and that all new Macs come bundled with a variety of useful and easy to use software applications, so that the purchaser can get started right away, without the need to download drivers, uninstall “bloatware” or other hassles.
Sales-wise, Macs have been steadily gaining on PCs for the last five years. The success of Apple’s “I’m a Mac” commercials have contributed greatly to Apple’s reputation as the more reliable, practical and fashionable computer.
The “Cult of Mac” seems unstoppable at the moment, with more and more Windows users “defecting” to Mac all the time, leaving some critics to speculate that Apple will eventually overtake Windows as the dominant computing platform. Granted, this could take years — but if current trends continue, we may all be joining the “Cult of Mac” before too long.
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