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eBay marketplace reverses revenue shrinkage

Well, then. The economy must be fine

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eBay's bread-and-butter marketplace business is growing again. In the fourth quarter, the company recorded $1.5bn in marketplace revenues, a 15 per cent leap from the previous year.

This - along with another beefy quarter from PayPal - helped boost total Q4 revenue to $2.4bn, a 16 per cent increase from the fall of 2008, when the worldwide economy was in free-fall.

"We delivered a strong fourth quarter with double-digit revenue growth driven by exceptional performance at PayPal and turnaround progress and momentum in our core eBay business," reads a canned statement from eBay cheif John Donahoe.

"We are starting 2010 with significant progress against our three-year growth strategies for PayPal and eBay and a clear focus on our priorities going forward."

The company pocketed profits of $1.36bn during the quarter - a nearly 300 per cent increase - but much of this was due to its (partial) sale of Skype. eBay sold most of Skype in November for a net gain of $1.4bn, but the company still reported Q4 revenues of $112m from the voice over IP service.

If you exclude Skype from eBay's Q4 2008 and Q4 2009 revenues, growth reached 19 per cent.

The company's Payment unit - i.e. PayPal - reported revenues of $795.6m, a 28 per cent year-on-year increase. Net total payment volume - aka TPV - was $21.4 billion, a 34 per cent leap.

With economy in meltdown at the end of 2008 and through much of 2009, eBay saw revenues shrink for three straight quarters. But this unprecedented streak ended in Q3.

Third-quarter profits fell 29 per cent to $350m. At the time, the company attributed the drop in part to a weaker US dollar and its "continuing shift to faster growing, lower margin businesses," and now, profits are on the rise again.

For the full year, revenues rose 2 per cent. And eBay has now upped its predictions for the first quarter of 2010, expecting sales of between $2.1bn and $2.2bn. ®

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