By Alistair Barr
SAN FRANCISCO (Reuters) - EBay Inc has been trying to revive its main marketplace business for at least a year and quarterly results from the e-commerce company this week may show those efforts are paying off.
"After several quarters of share losses in the U.S., eBay's marketplace business has been showing signs of a turnaround," Doug Anmuth, an analyst at J.P. Morgan, wrote in a recent note to investors. "EBay has made numerous marketplace improvements."
EBay shares are up more than 17 percent so far this year as investors bet the company will benefit from rapid growth in online commerce.
EBay's Internet marketplace, the biggest of its kind, brings together buyers and sellers and the company makes money by charging fees on transactions and other activity. Meanwhile, its fast-growing PayPal unit takes a cut of online payments.
In the first quarter of 2011, eBay's revenue climbed 16 percent to $2.5 billion, while net income rose 12 percent to $475.9 million, or 36 cents per share. Excluding stock-based compensation expenses and other items, profit rose 12 percent to $619 million, or 47 cents per share.
Second-quarter earnings, due July 20 after hours, are forecast to be 46 cents per share, according to a survey of analysts by Thomson Reuters I/B/E/S. Those estimates exclude stock-based compensation expenses and other items.
Second-quarter revenue is expected to be $2.607 billion, according to Thomson Reuters I/B/E/S.
Gross merchandise value, or GMV, excluding vehicle sales, a closely watched measure of activity on eBay's marketplace, will likely increase 10 percent in the second quarter, versus a year earlier, according to Cowen & Co analyst Jim Friedland.
Friedland and J.P. Morgan's Anmuth both said growth could be stronger than that.
Sales through eBay's marketplace were up 14.6 percent in June, compared with the same month a year ago. That compares with year-over-year sales growth of 12.6 percent in May, according to ChannelAdvisor, a software provider that helps retailers sell more online.
"This data -- which has been directionally accurate -- suggests continued positive momentum for eBay's U.S. marketplace business," Anmuth wrote.
EBay has tried to increase activity on its marketplace by improving the buying experience for shoppers while providing incentives for sellers to list more items and offer free shipping.
In 2010, eBay ran test promotions, offering lower-volume sellers free auction listings and a free "Buy it Now" button on each of those listings. Previously, these consumer, or non-store sellers, had to pay upfront listing fees.
Those types of promotions drove "significant" increases in both new listers and listings, eBay said earlier this year.
In April, eBay put similar pricing changes in place permanently.
EBay sellers also pay so-called final-value fees, which are based on the price of goods sold and are levied after transactions are completed.
EBay recently cut final-value fee rates for high-volume sellers on its marketplace. The company also applied this fee to the total amount of a sale including shipping costs, hoping to encourage more sellers to offer free shipping.
J.P. Morgan's Anmuth said eBay has invested in more buyer protections and improved searches on its website to enhance the shopping experience.
(Reporting by Alistair Barr, editing by Maureen Bavdek)