The cower of three

Now it is personal. At first eBay's downward drift this year looked like a general disenchantment with the Internet sector. But after an underwhelming Q1 earnings release and then a disappointing analyst day the market really is down on eBay.

I have some advice for Meg Whitman: stop going on about the power of three. I don't believe there is anything magical about owning three companies. And what about Shopping.com? Doesn't that make it four? Such mystical talk does not inspire investors.

Another piece of advice: drop the adverts. I noticed recently that when you search for items, the results page has a banner ad. at the top. This is wrong wrong wrong. Hopefully it is just a temporary experiment. It is no good spending millions on sponsored adverts on Google to draw customers to your site and then putting adverts on your own site to draw them away. Everything eBay does should be about enhancing the buying / selling experience and banner ads indicate a lack of focus / desperation by the management.

Oh, and Jim Cramer thinks it going to $30. Thanks Jim. I'm sure anyone who filled up the truck on your recommendation when it went below $45 is really pleased.

The eBay share price has taught me an important lesson about diversity. However good eBay looked you have to accept that you could be wrong and spread your portfolio around some of the other great opportunities. If there were only a handful of interesting companies around then a case could be made for only owning a couple. But as there are hundreds of decent opportunities it makes sense to hedge a bit.

eBay will recover... eventually.