The Hard Sell: eBay Appeals to Its Top Auctioneers for Business

The online auctioneer reminds its 'power sellers' that there's still time to sell before Christmas.
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SAN FRANCISCO -- Online auction house

eBay

(EBAY) - Get Report

is calling out to its biggest customers this holiday season -- literally.

The largest Internet auction company has been phoning hundreds of its top sellers in recent days in an effort to shore up the number of auctions on its site, the company says. After peaking in early December, the number of items up for auction on its site has fallen about 40% to about 2.28 million Friday.

For eBay, the holiday shopping season ends early. Once an item is put up for auction, the bidding process can last 10 days. After adding in the days needed for the buyer to send a check to the seller, and for the seller to mail the auctioned item to the buyer, the process can take weeks. Seasoned eBayites know this and are cooling off auctions.

So eBay has been on a telephone campaign to several hundred "power sellers" to "thank them for their support and also remind them that this is a great time to list because there's still an opportunity to sell items before Christmas," says Kristin Seuell, an eBay spokeswoman.

eBay's stock is off 18% since Nov. 24, the day before Thanksgiving. Should the number of auctions keep falling, it could fall further. It ran up more than 30% in November before Thanksgiving amid hopes of a smashing holiday season as Internet users turned to the auction site as a place to find unique gifts. Unless shoppers got in early, they might find slim pickings.

Worse for eBay, individual investors have picked up on the recent slump in auctions. On eBay message boards hosted by

Yahoo!

(YHOO)

, it's been a hot topic of discussion for some traders. "Selling eBay's stock seems to be more popular than selling items on eBay," quipped one poster.

eBay says the downturn happens every holiday season, but declined to provide year-ago figures for comparison. Last year, eBay's stock held up through Christmas, but lost nearly half its value in the first two weeks of January and didn't gain that ground back until the end of February. This year, the benefit of hindsight seems to be pulling investors away from the stock earlier, sapping momentum while other e-commerce stocks are rising.

Some say there's too much focus on the number of listings. "It's confusing," says Paul LeCoque, a money manager at

Longview Capital

, which holds eBay shares. "The listings don't necessarily turn into revenue." What's more important, he says, is how many auctions close with buyers, and the subsequent revenue and margins. Investors won't hear those numbers until January, when the company reports its fourth-quarter results. LeCoque and others would like eBay to take the auction ticker off the site because short-term traders use it as a measure of the company's progress.

One seller, who asked not to be identified, has sold thousands of collectibles and books on eBay during the past four years. He says he has no intention of posting more items until next year. There aren't enough buyers, so auctions don't get as high a bid as sellers want, he says. "For most sellers, it's over," he says. "We just can't participate in year-end sales."