eBay’s 2010 fourth quarter results are out today and are (as usual) on the face of it better than expected. Revenues are up 5% (or 10% excluding Skype) compared to Q4 2009.
It should be remember that eBay are in the final of the three year turnaround plan that John Donahoe announced. Having stated that it would take three years to do if eBay don’t have a stellar performance this year then Donahoe will have failed in his promises to sellers and investors.
eBay had three main goals for 2010:
- Become a more customer focused company
- Create better experiences through technology driven innovation
- Focus on operating efficiency to reinvest in growth
John Donahoe says that eBay have made steady progress each quarter, and ended the year with strong Q4 results. He added that he is “proud of what our teams accomplished”.
eBay definitely met some of those goals, for instance mobile sales almost tripled to nearly $2billion in 2010, and they’re forecasting they’ll double again to $4billion in 2011. eBay’s mobile apps for iPhone, Android and Blackberry are paying dividends for the company as well as making it easier for buyers to purchase on eBay.
PayPal increased their penetration on eBay by four points to 70%, although I’d expect that figure to be much higher in the UK. PayPal broke all the records in Europe exceeding $1billion in revenue and Bill Me Later has turned profitable earlier thane expected.
Overall eBay’s earnings are starting to become very predictable – eBay gives what turns out to be a low ball guidance and they buy some companies (this time around it was Milo.com, Critical Path and brands4friends). eBay then does better than expected and PayPal does even better.
What will be really interesting is the markets reaction and what happens to the share price tomorrow. Currently in after hours trading eBay shares which closed at $29.10 are currently up 2.75% to $29.90 so early indications are that investors are pleased with the news.