eBay Stock Prediction: Buying Visual Search Engine Corrigon Improves eBay’s MarketPlace

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology  – Senior Analyst at I Know First

eBay Stock Prediction

Summary:

  • eBay’s acquisition of visual search engine Corrigon will help its e-commerce customers find product faster and easier.
  • Facebook’s new e-commerce platform, MarketPlace, is likely helped by its 2015 purchase of TheFind product search engine.
  • Corrigon is therefore eBay’s new tool to make sure it remains ahead of Facebook in e-commerce.
  • Alibaba and Amazon are already giant rivals of eBay. Facebook’s e-commerce ambition is another threat to eBay’s future growth.
  • Buying new technology to improve the shopping experience of its online shopping customers is therefore a necessity for eBay.

Investors should not discount eBay’s (EBAY) ability to compete with Facebook’s (FB) MarketPlace buy & sell platform. Being the pioneer in e-commerce eBay is not just going to let Facebook MarketPlace diminish its leadership. The recent acquisition of visual search engine maker Corrigon Inc. will further enhance the shopping experience on eBay.

eBay already has its own Cassini search engine. However, Corrigon’s visual-based approach to search could be the equalizer to Facebook’s acquisition of TheFind product search engine. TheFind’s differentiating feature is that it emphasized visual search for products. No doubt Facebook’s MarketPlace e-commerce platform was largely made possible by TheFind’s visual-based approach to product search.

It is estimated that eBay paid less than $30 million for Corrigon. Corrigon’s technology therefore can augment eBay’s Cassini search engine to further improve the shopping experience of its customers. Corrigon could help eBay retain the loyalty of its customers. Facebook’s massive popularity makes it a long-term threat to eBay.

New Technology Can Help eBay Compete Better

Amazon (AMZN) and Alibaba (BABA) are already heavyweight rivals of eBay. eBay doesn’t need another mega-cap like Facebook stealing its customers away. The $1.74 trillion online retail business is currently dominated by Alibaba and Amazon. eBay is only a far third in online global retail, with 4.5% share.

eBay Stock Prediction

(Source: InternetRetailer.com)

Corrigon’s visual search engine can also complement Amazon’s purchase of Expertmaker last May. Corrigon will empower eBay customers with visual product search. Expertmaker will use its Artificial Intelligence expertise to better display products at eBay’s marketplace. As of Q1 2016, 60% of products listed for sale or auction at eBay now uses the structured data rules. Artificial Intelligence from Expertmarket will help eBay vendors improve their search engine placements.

Speaking of Artificial Intelligence, eBay also bought SalesPredict last July. SalesPredict is also AI-flavored firm that uses advanced analytics to predict shopper’s behavior and sales conversion. SalesPredict is therefore another tool to enhance eBay’s e-commerce business via machine-learning and data science analysis.

Using Artificial Intelligence could improve eBay’s growth. New technologies that improve the shopping experience could help eBay attract more mobile users. As of August 2016, eBay’s mobile app is only the sixth most used e-commerce mobile app in America. The Gross Merchandise Volume (GMV) of eBay has also been largely flat over the previous 10 quarters.

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(Source: Statista)

Improving the shopping experience might help eBay attract more mobile users. E-commerce players needs a robust mobile audience to see any substantial growth in their business. Letting mobile users use visual search and AI-enhanced product browsing could hopefully attract their loyalty to eBay.

Conclusion

I recommend going long on eBay before it reports its earnings next week. eBay has consistently beaten Wall Street earnings and revenue estimates for the last eight quarters. The stock could shoot up higher next week after eBay reports another beat on earnings.

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(Source: Estimize)

The recent acquisition of Corrigon, Expertmarket, and SalesPredict could help eBay compete better with its biggest rivals, Alibaba and Amazon. Furthermore, eBay has also learned to compete better in emerging markets like the Philippines. Alibaba-owned Lazada became very successful in Southeast Asia because of its Cash-on-Delivery payment system.

I’m happy to report that eBay Philippines has also started allowing customers to shop and pay using the Cash-on-Delivery method. My point is that eBay’s international growth is now easier now that it can cater to customers who do not have PayPal (PYPL) or credit card. eBay Philippines now also accept payment via direct over-the-counter or mobile bank deposits.

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The 3-month and One-year forecasts from I Know First are also favorable for EBAY. Adding EBAY to your stock now might prove profitable after one year. I am long EBAY, AMZN, and BABA. I like these three giants of e-commerce.

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I Know First Past Success With EBAY

I Know First has been bullish on EBAY in past forecasts. For example, in this 1 month Hedge Fund Stocks forecast, the I Know First algorithm had been bullish on EBAY. During the 1 month period, EBAY had over a 35% return.

This forecast was sent out to I Know First subscribers on June 27th, 2016. To subscribe now click here.


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