eBay Inc (NASDAQ:EBAY)’s improved search engine optimization techniques have played a critical role in helping the site attract new users. The announcement was made by CSLA while reviewing the eBay’s third-quarter results for 2016. The effectiveness evaluation of the SEO in attracting new site visitors was evaluated by Search metrics that placed the sequential new user growth at 20 percent.

Nonetheless, CLSA pointed out that increase in new active buyers to the site was slow in the third quarter. This argument borrows from the fact that this period reported 1 million active customers compared to the 2 million users in the second quarter of 2016. According to the reviewer, the relatively slow progress may be attributed to the heavy promotions in India last year that exposed the brand to tough comparisons.

The eBay improved SEO and its impact on sales

The improvement in eBay SEO infers to the shift in search results display from merchant-based to product-based results. As users adapt to the new SEO practice, CLSA is optimistic that their experience with the site will improve over time and thus attracting, even more, users. The firm also pegs its optimism of the expectation of the more than 500,000 merchants across the United Sates positive response to the improved system and stir up an efficient user experience. The seller hub tool was also launched in Europe during the third quarter of 2016.

Market response to the review and future

The SEO improvement and reciprocating sales have not been well received in the financial markets. The firm shares have therefore witnessed underperformance. For instance, the eBay share price dipped by 11.33 percent to operate at $28.84 by the time CLSA came up with this report. Nevertheless, CLSA is optimistic that eBay will eventually recover its market control in the short run.

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The firm raised the online retailer’s non-GAAP earning per share value projections for 2018 by one percent to $2.21 from $2.19. CLSA further raised eBay’s share price target for 2018 from $27 to $30 while maintaining that the current slug is only temporary. The firm points to possible higher take rates and healthy cost controls as the key drivers of the improved EBAY share earnings and price.