Feeds

eBay endures revenue shrinkage deja vu

But all will be fine in 2011

Beginner's guide to SSL certificates

At the end of 2008, for the first time in its history, eBay stomached a year-over-year decline in quarterly revenue. And at the beginning of 2009, it happened again.

For three months ending March 31, the online tat house pulled in revenues of $2.02bn, an eight per cent dip from the first quarter of 2008, while profits topped out at $357m, a 22 per cent shrinkage from Q1 2008.

Chief executive John Donahoe played the party line. "We delivered solid Q1 results, exceeding expectations in a tough economy," he told analysts and reporters during the company's requisite quarterly earnings call. "Overall, we're a strong company operating in a challenging economic environment."

Last month, Donahoe told the world his waning outfit would refocus efforts on its online marketplace and payment units. And one of those units is in the tank. The marketplace business - which consists of eBay, Shopping.com, StubHub, Kijiji, and other e-commerce sites - pulled in revenues of $1.22bn during the first quarter, a 18 per cent drop.

Gross merchandising volume - or GMV, the sum of all auctions closed on eBay during the quarter and prime indicator of tat house health - shrunk 16 per cent. That's three quarters of shrinkage on the hop. The primary culprit is the company's core auction biz, which accounts for roughly half of GMV, according to Donahoe. Online classifieds revenue from sites like Kijiji actually increased, jumping 23 per cent.

Though Donahoe put the blame squarely on the worldwide economy and a strengthening US dollar, he admitted that in 2009, his marketplace unit would continue to grow at a slower rate than the net's overall e-commerce biz. But he insisted that by 2011, as the company expands its classifieds and secondhand ticket businesses (read: StubHub), growth rates will exceed those of the net as a whole.

By 2011, he said, the company's auction biz will account for only 30 to 40 per cent of the all-important GMV. But auctions are still very much on Donahoe 2011-obsessed brain. Last week, eBay said it would pay $1.2bn for South Korea's leading online auction house, Gmarket.

eBay's payments unit, anchored PayPal, is a different story. The company's online payment boondoggle raked in $643m in revenue, a 11 per cent leap. Net total payment volume, or TPV, was $15.86bn, a 10 per cent from last year, thanks in part to the recent acquisition of instant-credit outfit Bill Me Later.

Donahoe insists he will double PayPal's business over the next three years.

eBay's communications unit - aka Skype - pulled in revenues of $153.2m, a 21 per cent increase, as the VoIP service added another 37.9 million users. But the company will soon part ways with Skype, after belatedly realizing its not a comms company. eBay claims it will spin Skype off with an IPO sometime in 2010, five years after paying $2.6bn for the Luxembourg-based outfit. ®

The next step in data security

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Bono: Apple will sort out monetising music where the labels failed
Remastered so hard it would be difficult or impossible to master it again
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.