eBay revenue up 9% for Q1 2010

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eBay last night released results for the first quarter of 2010, with revenues of $2.2 billion, up 9% year on year; excluding Skype, revenue was up 18%. Net income rose 11% to $397.6m (£258m). President and CEO John Donahoe called it “another strong step toward achieving our three-year growth and profitability goals”.

Sadly, the markets didn’t agree with him: shares fell 8.7% in after-hours trading following disappointment that the increase was not as big as analysts had hoped.


As has become the norm with recent earnings calls, the payments business (PayPal plus BillMeLater) was the star of the show, with an increase in revenue of 26%. Net total payment volume year over year was $21.3 billion, up 35% YonY. Growth was primarily driven by the expansion of PayPal Merchant Services – that is, off-eBay payments; this is as expected, because there can’t be much on-eBay growth left to be achieved. Other highlights from Payments include:

  • the new payment services agreement with China UnionPay, adding potentially 2.1 billion new users to PayPal’s membership
  • the “Send Money” app for the iPhone, which was downloaded more than a million times in its first three weeks
  • new integration with Facebook


The situation in Marketplaces – covering eBay, StubHub, Shopping.com, eBay Classified (ex-Kijiji) and other ecommerce sites – is a little more complex. The headline figure, $13.4 billion in GMV (i.e. sales), up 24%, looks impressive, as does a 13% increase in revenue versus the same quarter of 2009. But dig a little deeper, and things aren’t quite so rosy:

The year-over-year increase was due primarily to growth across all of the company’s e-commerce businesses, as well as the inclusion of Gmarket and the positive impact from foreign currency movements against the U.S. dollar.

Gmarket is the Korean site eBay bought last year; their figures weren’t included in Q109. Currency advantages are nice if you’re a shareholder, but they indicate nothing about the real state of the Marketplaces business. Fortunately, Scot Wingo has produced figures that show Marketplaces’ GMV excluding Gmarket, currency fluctuations and Motors (the last generally considered to be a law unto itself). Scot’s figures show eBay in the US growing at 6%, internationally at 9% so overall, 8% year on year – which doesn’t meet eBay’s stated goal for this year of growing at the same rate as ecommerce, currently around 11% in the US.

Of course, this quarter’s figures don’t include the results of the recent fee changes on eBay.com, which are designed to vastly increase the number of items listed on the site, and up GMV as a consequence. It will take at least a quarter and probably the rest of this year to see how those changes affect seller behaviour, but I can’t help thinking that with eBay so volatile, so ready to close sellers accounts at a moment’s notice or less, relying for growth on this strategy is not going to work for them.

2 Responses

  1. I can give you ONE reason. I sold like a maniac in Feb/March BEFORE the onset of the higher FVFs. I also tended to sell items that went for higher value than my normal again because they would be more in that 3.5% FVF bracket.

    I was not the only one doing this.

    The question will be if they will pull it off in Q2 because the extra money they get in fees will be against people who arent listing as much because of the higher fees and exposure differences AND because they are burned out for a while due to selling too much in Q1. I know I havent placed much at all this month because after all I did in March I am taking a break.

    I dont buy that the “lower insertion fees” will do much because all they do is encourage people to list low-end items with no minimum to take advantage of the 100 free listings (which will come back to bite them — as well as not net much money for ebay) and to sell with a lower sell-through rate.

    It may end up with a laffer curve wash.

  2. Usual meaningless ‘spin’ from the markets.
    We have seen a decline in sales via the eBay channel and we strongly suspect others are seeing this as well.
    Interestingly all our other channels are performing well – go figure.
    We strongly suspect that overall traffic and listing views are well down and put simply eBay UK is not performing in terms of attracting quality buyers to our category.
    We won’t bother to list all the problems but just try using the so called search function – almost useless.
    If you have some time over this Bank Holiday weekend check out this link to the Auctionbytes site where some of the fundamental problems with eBay are nicely laid out for you:
    It’s going to be a long hard summer for all of us.
    pip pip



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