$2.6b Skype investment now worth $90m per quarter
UPDATE: Apparently the guys over at GigaOm agree with me. Kevin Kelleher calls eBay and unwanted bargain in this article.
eBay released earnings earlier tonight with little cause for celebration. Revenue grew 30% to $1.83b, while eBay’s core auction business continued to slow. Global listings were down 6%, while Gross Merchandise Volume or GMV slowed to 12% growth down from the 18% growth experienced last year. While all of this news does sound unimpressive, there are a number of metrics that show the strength of eBay:
- Despite the drop in global listings, net revenues were up 26% due to eBay’s efforts to rid the site of low value auctions and concentrate on higher earning auctions.
- Paypal revenues grew 34% to $454m (now account for 25% of gross revenues vs. 24% last year).
- Skype revenues grew 100% to $90m, while registered users is now up 94% to 220 million.
- Advertising grew 100% to $76m from a year ago
As of press time, eBay was trading down 1.55% due to the slow in listings and no raise in future guidance. eBay is up 13% year to date and will most likely continue to do well over the long term based upon the growth projections of Paypal and focus on higher yielding auctions. I believe they will re-enter the Chinese market at some point and will drive revenues higher through mobile offerings such as Paypal Mobile. Although initiatives such as Shopping.com, Kijiji, and Skype are still quite small, they will continue to grow and allow eBay to build synergies amongst its various brands. Pick up eBay on the weakness after earnings, as this internet conglomerate will continue to shine.
