First qtr 09 results show eBay marketplace slide and PayPal growth continuing
American ecommerce giant, eBay, has reported a healthy, if reduced profit, for the first quarter of 2009.
Net income for the quarter, at $US357million, or 28c per share, was down 22% on the same quarter last year.
The drop was attributable mainly to a continuing slide in the popularity of eBay’s core marketplaces.
Transaction revenues in the marketplaces were 18% lower than in the same quarter last year.
Moreover the slip was equally spread across the globe, with the share of international (i.e. non-US) transaction revenues for eBay marketplaces dropping 3% to 51% in the quarter.
Even so, PayPal held its own for the quarter and now claims some 73million + active registered accounts around the globe, up 22% over the year.
PayPal now accounts for just under one-third of all eBay’s revenues.
Skype, too, continued to grow slowly but steadily, adding 37.9 million new users and ending the quarter with more than 443.2 million registered users..
“We delivered solid results in the first quarter and moved aggressively to strengthen our portfolio for longer-term growth,” said eBay Inc. President and CEO John Donahoe.
“With a macroeconomic environment that remains challenging, we are focused on operating discipline and strong execution of our three-year growth priorities in our core ecommerce and online payments businesses.”
Earlier this month (14th April) Donahoe announced that eBay would spin-off Skype as a separate company through an initial public offering (IPO) of shares in 2010.
"Skype is a great stand-alone business with strong fundamentals and accelerating momentum,"
said Donahoe.
"But it's clear that Skype has limited synergies with eBay and PayPal. We believe operating Skype as a stand-alone publicly traded company is the best path for maximizing its potential.“
“This will give Skype the focus and resources required to continue its growth and effectively compete in online voice and video communications.”
“ In addition, separating Skype will allow eBay to focus entirely on our two core growth engines—e-commerce and online payments—and deliver long-term value to our stockholders."
Donahoe said that Skype had generated revenues of more than $US551 million in 2008 and is on track to crack US1billion in revenues in coming years.
The IPO will doubtless help recoup some of the $US3billion eBay paid for Skype when it bought the business back in 2005.
And in other eBay news, the company has expanded its Korean operations with a$US1.2billion purchase of a majority share in retail ecommerce marketplace, Gmarket (www.gmarket.co.kr).
Last year Gmarket is said to have generated revenues of more than $US220million from a gross merchandise volume of some $US3.2billion.
eBay already owns another leading online retailer in Korea – Internet Auction Co (IAC).
Although slightly smaller than Gmarket, IAC is still a very big player in the Korean market with in excess of $2.2billion in gross merchandise volumes last year.
For more information go to
http://investor.ebay.com/
www.ebay.com
www.auction.co.kr
www.gmarket.co.kr
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