In May, we reported some kind of Google penalty hit eBay search visibility by nearly 50%. The penalty was due to a manual action by Google and not the Panda 4.0 update. It was in relation to some category pages eBay users landed to while navigating the site. It made users and moreover Google wonder as to why these pages existed. The chief financial officer for eBay, Bob Swan on the company's earnings call said the penalty had a major impact on their earnings.
This week, eBay's quarterly earnings saw a 13% increase in revenue, the percentage could have been higher, had the site not been penalized by the search engine giant. Swan said Marketplaces delivered revenue of $2.2 billion with a 6% increase, GMV at 8% and operating margin saw a decline of 340 basis points. The company got off to a good start but went through many obstacles in late May.
The cyber-attack and the Google SEO together had an immediate impact on the GMV growth. June GMV growth was 7% with lower conversion and slower active buyer growth. The company has made significant investments to get eBay users re-engaged including seller incentives, coupons and increased marketing spend.
Swan also said the SEO changes could take some time and cost some more to recover from. eBay reduced its revenue guidance for the full year by $200 million. Swan said some of the trouble was caused by cyber security/password reset debacle but it is quite clear that currently the SEO issues are the biggest problem for the company.
For the entire call details, click here.