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eBay Takes a Hit - Part 2 in a Multi-Part Series

March 10, 2015

eBay Takes a Hit

In my last blog entry, I shared a bit about our experience as a company in 2014.  As top sellers in the eBay Marketplace, we were experiencing a consistent downward trend in sales for the first time ever.  Our research into the possible causes of this issue revealed a series of events that occurred behind the scenes at eBay during 2014. We believe that these events heavily contributed to our business woes.

Our attention was first drawn to an event that occurred in late February or early March of 2014. Somehow, not even eBay knows for sure when this event occurred.  This is shocking (and rather frightening) because this event happened to be a major security breach to the eBay database.  It was reported (read the Forbes articles here and here) that a small group of hackers was able to penetrate the stalwart defenses of this major online marketplace.  The most startling aspect of this story is that the invasion was not discovered for at least ten weeks after its occurrence.  We were told that the hackers gained access through the theft of employee credentials, and that the information compromised included access to names, eBay email addresses, encrypted passwords, email addresses, postal addresses, phone numbers and the date of birth of customers.   

 After the discovery of this issue (as well as other factors that I will be sharing in my next couple of entries) I wrote a letter to John Donahoe, President of eBay.  I received a response written by an individual “In the Office of the President”.  In regards to the issue at hand, he stated, “The security breach has had many sellers concerned, and I can understand why this may be one of your target points.  While you were concerned that the hackers may have actually done something, we can assure you that our data shows no significant increase in any fraudulent activities on eBay”.

In this statement issued by the office of the president, I took “a lot of people were concerned” as a sure sign that I was not the only person expressing my fear about the breach.  If I was that fearful as a seller, what kind of impact was there on buyer confidence?  The second portion of the statement  claiming “no significant increase” also caught my attention.  Does that mean there was an increase in fraudulent activity, just not “significant”?  What would have to happen for it to be considered significant?  What unreported activity did the hackers accomplish during their lengthy and unchallenged visit to the inner workings of eBay?  

I find it interesting that a few weeks after the invasion into eBay, our sales were beginning to suffer.  Coincidence or connection?  This is one question I’m confident we will never have a definite answer to.  I do know though that, when the breach was finally discovered in May of 2014, every eBay user was locked out of their eBay account until they changed their password.  How many users decided the risk was too great?  How many just didn't want to go to the trouble of making the change?  How many could not figure out how to change their password?  These are just a few of the questions I have about this first major event that started the snowball of 2014 eBay events.

Sadly, we searched for weeks before we found an admission by anyone from eBay that this event may have impacted eBay sellers experiences.  That admission will be discussed in my next blog entry.


See the rest of our eBay series here:

Part I - Why are My eBay Sales Down? 
Part II - eBay Takes a Hit

Part III - Google Takes Aim 
Part IV - eBay Alternatives? 
Part V - Fixing the Defects in eBay's Defect System 
Part VI - Breaking Up is Hard to Do: eBay's Split from PayPal 
Part VII - Is eBay's Cassini Really the "Best Match"? 
Part VIII - Is eBay's Cassini Stuck in Orbit? 
The Plan, Part I - Positioning for More than Survival 
The Plan, Part II - Expanding Our Reach Beyond eBay
Making Connections

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