eBay’s Next Move: Artificial Intelligence To Refine Product Searches

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EBAY
eBay

After indicating that the company is working on a turnaround plan this year, eBay (NASDAQ:EBAY) seems to be aggressively pursuing initiatives to fulfill its goals of making its platform simpler and more efficient for both buyers and sellers. Reports suggest that the company recently acquired an artificial intelligence and analytics company based out of Sweden called Expertmaker.  One of the key turnaround goals of eBay is to encourage sellers to define their products using structured data, making it easier for the marketplace to show relevant search results to buyers.  The acquisition of Expertmaker should help the company in this initiative, given its expertise in artificial intelligence, machine learning and big data. As eBay works towards improving its platform, results of these initiatives are now visible. The company reported a 4% year-on-year increase in revenues in Q12016 and a better than expected EPS. (earnings per share). We believe as eBay systematically addresses the issues plaguing its platform and resolves them through strategic initiatives, its turnaround plan should lead to an improvement in revenues and earnings going forward.

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Expertmaker’s Technology Can Structure eBay’s ‘Noisy’ Data, Attracting More Buyers

While Expertmaker had worked with eBay since 2010, though through the acquisition the latter is now more thouroghly integrate the former’s technology to make its noisy data more structured and easy for searches. Expertmaker’s genetics-inspired multi-AI (artificial intelligence) approach  is useful to extract hidden value from data. This technology can be extremely useful for eBay, since the hundreads of millions of listings on the company’s platform need to be cleansed and structured to be converted into useful information and meaningful searches. For instance, Expertmaker’s technology can allow eBay to fill incomplete product information such as colour options, materials used, etc. from other sources, thus allowing buyers to sort product based on these categories.

The number of active users on its platform is a key revenue driver for eBay and we expect this figure to increase steadily from 165 million in 2016 to around 205 million by the end of our forecast period.

eBay is taking several initiatives, including better product cataloguing on its platform, to attract more users. The company is working on a branding exercise, offering more unique inventory, providing convenient pick up options to sellers and entering into partnerships to encourage multi-channel retailing. A richer inventory with easier searches will attract more users to its platform.   We believe that the acquisition of Expertmaker will help the company achieve this goal and drive revenues in future.