eBay to Launch Its Own Social Networking Service

SAN FRANCISCO – Hoping to woo shoppers who say eBay Inc. has lost its folksy appeal, the world's largest online auction plans to launch its own version of a social networking service Wednesday and is promising other customer-friendly features by year's end.

The "Neighborhoods" feature encourages users to post photos, product reviews, tips and responses — creating a far more visual and interactive experience than eBay's text-based discussion forums.

The move is one result of a broad reorganization strategy started in late 2006, when the San Jose-based e-commerce leader's scorching growth rate began to slow.

Individuals listed 480 million items on eBay in the second quarter, down 6 percent from the first quarter and down 2 percent from a year earlier. The number of listings by "power sellers" who operated eBay stores was 79.1 million — unchanged from the previous quarter but down 25 percent from a year earlier.

Many users complain that the site's size — it listed 559.1 million items worth $14.46 billion in the second quarter — can make it tough to find and purchase a specific product quickly. Users are turning to rivals such as Seattle-based Amazon.com, Salt Lake City-based Overstock.com Inc. and Chicago-based uBid Inc.

"We knew we had to change things internally because we couldn't innovate with the effectiveness or speed we needed," spokesman Hani Durzy said Tuesday.

Marketplaces President John Donahoe spearheaded a "philosophical shift" this year in which engineers, product managers, quality assurance representatives and other employees were regrouped from traditional function-based "silos" into two teams — a buyer experience team and a seller experience team.

Neighborhoods — which aggregates postings from eBay blogs, guides and reviews — was the brainchild of an "engagement" subgroup of the buyer-experience team.

Among the 600 new neighborhoods is "Shoe Heads," intended as a haven for footwear fashionistas. Others range from Beyonce to Battlestar Galactica, and still more will be formed based on popularity of search terms and community feedback.

"People who are passionate about certain brands, trends, celebrities or products have been discovering and trading with one another for years," said Jamie Iannone, an eBay vice president in charge of buyer experience. "Neighborhoods makes this even easier."

Later this year eBay will roll out "One Click Bid," which should boost a buyer's chances of winning during the final 15 minutes. EBay also plans to streamline its "My eBay" service and speed its cumbersome checkout process.

And it is beta testing features called "Snapshot View," the e-commerce equivalent of window shopping; "Best Match," an automatic sorting option; and "Countdown," which features improvements in real-time auction monitoring.

Building a sense of community should keep buyers and sellers at eBay longer, experts said Tuesday.

EBay building neighborhoods is the equivalent of Nordstrom or another brick-and-mortar retailer adding a cafe and lounge.

"The idea is this will provide more 'stickiness' so a user will come back more often, spend more time there and will more likely purchase items," said Karsten Weide, an analyst at research firm IDC. "This should make consumers' lives a whole lot easier."