January 25 2008

eBay bounces back

The latest eBay fourth quarter and full 2007 results show buoyant trading in the US, UK and Germany.

eBay posted fourth quarter revenue of $2.18 billion, representing a $461 million year-over-year increase. Revenue grew across all the businesses within eBay but the biggest growth came from PayPal, StubHub (US ticketing site), Skype, classifieds and advertising.

The Marketplaces business unit, which consists of eBay, Shopping.com, StubHub, Kijiji and other ecommerce sites, had a strong quarter with a record $1.50 billion in revenue, equating to 21% year-over-year growth.

Revenue growth was driven by StubHub, advertising, the fixed price format on eBay which now accounts for 42% of volume compared to 38% a year ago and, in part, by the benefit of a weaker U.S. dollar.

Based on average monthly unique visits, eBay was the number one ecommerce site in the U.S., UK and Germany during the 2007 holiday shopping season, according to Nielsen Online.

Approximately 54% of Marketplaces revenue came from markets outside the U.S. Gross merchandise volume was $16.21 billion for the quarter, an increase of 12% over the fourth quarter of 2006. eBay continues to focus on buyer and seller initiatives to accelerate gross merchandise volume in the U.S., Germany and the United Kingdom.

PayPal posted another exceptional quarter with $563 million in revenue, an increase of 35% year-over-year. Net total payment volume (TPV) for the quarter was $14.04 billion, an increase of 35% year-over-year. The revenue and net TPV growth represents increased penetration on eBay as well as expanded adoption of PayPal Merchant Services across the Web.

"We're very pleased with the results for the quarter which were strengthened by a solid holiday shopping season," said eBay Inc. President and CEO, Meg Whitman.

Interestingly eBay also started that PayPal will continue to focus on greater penetration into the Marketplaces business as well as the acquisition of new merchants. Who we wonder, Visa? Mastercard? AMEX?

Another interesting result is the reduction in the number of eBay stores. At the end of 2006 there were 593,000 at the end of 2007 this had reduced to 532,000 with most of those lost from stores hosted outside of the US. Meanwhile, the number of registered users of eBay have increased dramatically, from 171.2 million in 2006 to 276.3 million.

by Marcus Austin (Web Editor)