NEW YORK (TheStreet) -- As eBay (EBAY) struggles with an admitted "hole" in its marketplace business, the e-commerce giant is treating StubHub as if it were a venture investment, focusing on user growth and loyalty over profits as a way to ensure the long-term footing of the business. StubHub may cast a pall over eBay's earnings results in 2014, but it remains a point of strength for the company and CEO John Donahoe.
eBay has received sharp criticism for its inattentiveness to PayPal, a once-dominant payments division that has come under pressure from a new breed of mobile apps, card readers and wallets. StubHub, however, appears to be a part of eBay that is managed with the entrepreneurial spirit of Silicon Valley's most prized businesses such as Uber, Facebook (FB), Twitter (TWTR), Amazon (AMZN) and Airbnb.
Instead of focusing on extracting ever-higher profits and revenue from StubHub, eBay is playing a long game by protecting its market position from new entrants, while also improving user loyalty within the ticket marketplace.
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In early 2014, eBay changed the way users see ticket prices on StubHub so that listings included all fees and not just the nominal price of a ticket. The move meant that tickets appeared higher in price than the past because fees wouldn't be disclosed later in a users' checkout, but it also added a new level of transparency.