eBay News: May Miss Profit Forecast; Extends Spam Initiative

Fewer Q4 listings may mean that eBay will report lower-than-expected fourth-quarter earnings, Safa Rashtchy, an analyst at Piper Jaffray & Co., told Bloomberg today.

Excluding certain items, profit may be as much as two cents a share, less than the 28-cent average estimate of analysts, Rashtchy said. Shares of San Jose-based EBay fell $1.08 to $29.70.

The prospect of a disappointed Wall Street must be vexing to eBay, since it was the most-popular online shopping site this holiday season.

Meanwhile, the auctioneer announced that it would extend and expand its "Safeguarding Member IDs" initiative. The program was introduced on the eBay Motors website and later on the UK and Australian sites.

In a posting on the announcement board, Rob Chesnut, eBay Sr. VP of Global Trust & Safety, said that the SMI program has been successful in reducing unwanted and malicious spam - including the "fake second chance offers" that are a favorite of crooks and phishers. As a result, eBay will roll out SMI on eBay.com and eBay.ca later this week.

"SMI adds a new layer of privacy by replacing specific User IDs with aliases (bidder 1, bidder 2, bidder 3, etc.). To ensure buyers continue to feel trust in the bidding process, SMI also provides an updated Bid History page with aggregate information about the bidders involved in a given listing, as well as their other recent activity with the listing's seller," Chesnut said.

Despite the apparent upside, their are concerns, as Ina Steiner pointed out Tuesday on AuctionBytes:

"The initiative, which reduces transparency on the site by shielding bidders' User IDs when bidding reaches $200 or greater, has been controversial, as it limits users' ability to detect shill bidding - a practice in which sellers bid on their own items, which is prohibited on eBay."

Addressing this concern, Chesnut noted that eBay "can proactively detect and investigate possible shill bidding scenarios with a higher rate of accuracy than ever before. Be assured that we will continue to monitor the sites where SMI has launched to ensure that increased shill bidding does not become an unintended consequence of SMI."