2010 Proves Profitable for eBay

Fourth quarter pushes overall results above predicted figures.

by Auctiva.com staff writer
- Jan 21, 2011

eBay generated slightly more revenue in 2010 than expected with the help of payment processor PayPal and an overall strong fourth quarter, eBay reported this week.

In 2010, eBay posted $9.2 billion in revenue, slightly more than what the company had projected when it reported third-quarter earnings in October. Back then, eBay expected revenue to reach between $9.05 billion and $9.15 billion for all of 2010. However, a 5-percent year-over-year increase during the fourth quarter—when revenue reached $2.5 billion—helped eBay surpass expectations.

eBay was also significantly more profitable in 2010 than in 2009—after excluding Skype from comparisons and using non-GAAP calculations. On this basis, quarterly net income grew 24 percent, to $684 million, while year-over-year profits rose 20 percent, to $2.3 billion.

eBay is positioned at the forefront of trends shaping the future of shopping and payments

"We delivered a strong fourth quarter and a solid year, driven by our customer focus, commitment to technology-led innovation and our operating discipline, which is enabling us to reinvest in growth," says John Donahoe, eBay's president and CEO. "We are driving strong global growth at PayPal and strengthening our core eBay business. And we are innovating quickly in areas such as mobile, which is helping to position us at the forefront of trends shaping the future of shopping and payments."

PayPal gave eBay a big boost during the fourth quarter. The payment processor handled payment volume of $26.9 billion from its 94.4 million active registered accounts during the last three months of 2010. Many of these payments were done on mobile devices, eBay notes, adding that mobile payments were up five-fold compared to 2009, exceeding eBay's expectations.

The eBay marketplace also performed well and saw a 10-percent increase in the number of items sold during the last quarter of 2010. Gross merchandize volume reached $15 billion; however, eBay confirmed the average sale price for goods dropped, as had been anecdotally noted by sellers posting in public forums. Fashion-related items did particularly well, helping the fashion sector grow faster than e-commerce in the U.K. and Germany, according to eBay.

eBay expects to generate between $2.4 billion and $2.5 billion in revenue during its first quarter of this year. It notes that annual revenue should surpass the $10 billion mark and reach as high as $10.6 billion for all of 2011.

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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