Baby steps,
eBay (Nasdaq: EBAY). Baby steps.
The online marketplace's latest financial report isn't a
whole lot different than the ones that you've been hearing
for several quarters now. Marketplace revenue (from eBay.com,
for example) is still shrinking. And PayPal and Skype are
still posting double-digit percentage gains in revenue.
However, the competence gap is closing. eBay's marketplace
revenue actually fell by a mere 1%, and would have inched
slightly higher if currency translations weren't a factor,
given its healthy gains overseas. Meanwhile growth
decelerated at PayPal (up 15%) and Skype (up 29%). All told,
quarterly revenue came to $2.2 billion, a gain of 6%, whereas
net income plummeted 29%, to $350 million.
This doesn't mean that PayPal or Skype are slacking off.
PayPal is still a world-beater, with its virtual platform
accounting for $17.7 billion in net transactions during the
three past months. There are now 78 million active PayPal
accounts -- a 19% increase year over year. It doesn't have
the near-ubiquity that
Visa (NYSE: V) or
MasterCard (NYSE: MA) has, but good luck
finding an online payment platform that is as widely
accepted. Even
Google 's (Nasdaq: GOOG) entry into this
niche has been a non-factor.
Skype is also smiling nicely. There are now 520.8 million
accounts, though eBay is set to sell a 65% stake in the voice
chat platform by year's end.
The most encouraging part of eBay's report, for a change,
is its marketplace business. It may be the least-liked of the
company's segments, but it's starting to stabilize. The 1%
year-over-year decline in revenue may sound bleak, but
compare that to dips of 14%, 18%, and 16% in each of the
three previous quarters, respectively. This also marks the
first quarter of sequential growth in marketplace revenue in
more than a year, even if one can argue that acquiring a few
international online classified sites helped pad results.
eBay still has a long way to go.
Amazon.com (Nasdaq: AMZN) reports tonight,
and analysts see healthy top-line growth there. In other
words, eBay still needs to come up with excuses as to why
it's not growing as fast as the real e-tail leader. The
company is emphasizing fixed-priced listings, so it certainly
deserves to be stacked up against Web-based retailers.
The market was disappointed with eBay's guidance for the
current quarter. Analysts were perched on the higher end of
its forecast of $2.2 billion to $2.3 billion in revenue and
$0.38 a share to $0.40 a share in non-GAAP earnings. However,
the range midpoints indicate sequential improvement. Before
you argue that a sales gain is what's supposed to happen
during the holidays, keep in mind that eBay suffered a
sequential decline on the top line last holiday season.
It's getting there, even if the "there" is still so far
away.
This article was originally published as
eBay, Heal Thyselfon
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