eBay's revenue and profits declined for the second quarter in a row, though a tight rein on costs allowed earnings per share to exceed estimates.
Overall revenue for the first quarter of 2009 was $2.02 billion, down 8 percent from the same quarter of 2008. Net income also fell 11 percent year-over-year, but earnings per share of 39 cents beat Wall Street's projection of 33 cents.
"We delivered solid Q1 results, exceeding expectations in a tough economy," states eBay CEO John Donahoe.
Small victories aside, the company's main business, eBay.com, saw deterioration continue, both in terms of traffic and sales volume. As expected, businesses outside of eBay.com put in strong performances for the quarter, with healthy growth in Payments, Classifieds and Skype.
Marketplace revenue was down 18 percent from the same quarter in 2008, to $1.22 billion. The precipitous drop came despite strength in the online classifieds portion of the division, which posted 23 percent growth. Marketplace gross merchandise volume was $10.8 billion, down 16 percent year-over-year.
Fixed-price business grew 12 percent, while the auction format declined 20 percent
The fixed-price business grew 12 percent during the quarter, and now accounts for half of gross merchandise volume, while the auction format declined 20 percent, the company reports.
eBay attributes the revenue decline to a difficult economy and the strengthening dollar against foreign currencies. More than halfabout 54 percentof first-quarter Marketplace revenue came from non-U.S. markets, the company reports.
Efforts to stabilize its core business have mainly focused on bringing buyers back to the site with financial incentives and greater selection. For example, nearly 30 percent of U.S. listings offered free shipping. However, that buyer-centric strategy has yet to pay off, as first-quarter page views slipped more than 25 percent year-over-year, according to Nielsen Online.
Meanwhile, PayPal and Skype continued to bolster eBay's overall performance, each posting double-digit growth. PayPal revenue grew 11 percent, while net total payment volume rose 10 percent. Skypewhich eBay plans to spin off early next yearsaw 21 percent year-over-year growth.
Looking forward, eBay anticipates growth in its core eBay business to be slower than the overall e-commerce market in 2009, on pace with the market in 2010 and above the market in 2011.
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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.