eBay Sees 3Q Revenue Bounce

But profits shrink on acquisitions and shift to lower-margin businesses.

by Auctiva.com staff writer
- Oct 21, 2009

After three consecutive quarters of backsliding revenue, eBay got better news than expected as its third-quarter revenue rose to $2.2 billion, largely on the strength of subsidiaries, such as PayPal.

Revenue was up on a quarterly basis as well as year-over-year, with growth of $120.3 million over the same period in 2008. However, profits continued to decline to $349.7 million, down from $492 million in 2008's third quarter.

eBay officials attribute the profit slide to costs from acquiring Bill Me Later, the weaker U.S. dollar and an ongoing shift to fixed-price and classifieds businesses, which bear lower margins.

"Our third-quarter results were strong, with PayPal gaining momentum and market share worldwide, and our core eBay business showing positive trends," says eBay President and CEO John Donahoe. "We're delivering on our commitments, executing on our plans and operating smarter and faster."

eBay reports revenue from its payments business grew 15 percent year-over-year to $688.1 million. Marketplaces recorded $1.4 billion in revenue, down 1 percent year-over-year. If not for the weakening U.S. dollar, the division would have seen 4 percent year-over-year growth, eBay says.

Skype continued to show impressive growth, despite its relatively small contribution to eBay's overall revenue. The telecommunications unit saw revenue jump 29 percent from a year ago to $185.2 million. eBay is in the process of spinning off Skype.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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