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iPhones grease eBay's quarter

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eBay today reported a 50 per cent increase in net profit, with its Marketplace, PayPal, and Skype businesses all showing growth.

For the quarter ending June 30, the auction king's Marketplace revenues totaled $1.29bn, representing a growth rate of 26 per cent, while PayPal revenues reached $454m, a 34 per cent increase. And with Skype signing big partnerships with WalMart, Toshiba, and SalesForce.com - not to mention the addition of 24 million new users - its revenue totaled $90m, a 103 per cent increase over the $44m reported in the second quarter of last year.

"The second quarter of 2007 was a very good one for the company, highlighted by accelerated revenue growth, consistent operating margins, and great earnings and cash flow growth," said eBay president and CEO Meg Whitman. In all, the company reported quarterly revenues of $1.83bn, a 30 per cent year over year increase. That translates to a net profit of $376m.

eBay's Marketplace business includes all worldwide eBay auction sites, classified ads sites, Shopping.com, Rent.com, and the secondhand ticket site StubHub. According to Whitman, auction revenue received a significant boost from the introduction of the iPhone - even though Apple's status symbol was on sale for only the last two days of the quarter. "In the U.S., year over year growth was up by about two points," she said. "Categories like jewelry, entertainment, and electronics - driven primarily by iPhone sales toward the end of the quarter - demonstrated particular strengths." Well, that's what she said.

But the company insists that auction performance still isn't "where we think it can be" in the U.S and in Germany, which is getting most of the company's attention in Europe. In preparation for the Christmas buying season, the company will soon redesign the eBay home page, improve search and support, and officially launch its eBay To Go service.

Now in beta, eBay To Go is a way of posting auctions and other eBay content to third-party web sites. "eBay To Go is exactly the kind of product that we think demonstrates the innovation that's driving toward our goal of re-engaging our users and making the auction experience fun," she said.

Though the company's big priority is to accelerate growth in the U.S. and Germany, Whitman also pointed to improved performance across other parts of Europe. eBay UK delivered "strong revenue growth." eBay France just announced its 10-millionth registered user. And Italy delivered "high double digit revenue growth."

Like the iPhone, eBay's first U.S.-based Kijiji classified site arrived at the very end of the second quarter, and Whitman has high hopes for the site's performance in the coming months. "We believe our success with Kijiji outside the U.S. is a great indicator of what can be achieved here, as we expand the buying and selling options of people around the country."®

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