They called eBay mature. As one of the first truly profitable
Internet companies and a survivor of the last bust, maybe eBay could
have taken some pride in the label.
In fact, some on the street were saying that when your biggest worry
is that you’ve maxed out the U.S. market, it might be time to set less
aggressive goals for growth.
But eBay wanted no part of it, JupiterKagan research analyst Vikram
Seghal told internetnews.com.
Yesterday, eBay gained 3 percent in late trading after the company posted
30 percent sales growth to $1.45 billion.
Earnings of 26 cents a share
also beat estimates. Fourth-quarter sales guidance of $1.62-$1.68
billion was to the lower end of $1.66 billion guidance, as was
earnings guidance of 27-28 cents a share.
“It’s back,” Seghal said of eBay’s growth.
Seghal specifically credits eBay’s willingness to diversify its
product offerings, with new services such as eBay Express, while maintaining an emphasis on its bread and butter — auctions.
EBay express provides a customized product set for users based on
items that are new and available right away. It also offers shopping
cart functionality to helps users add items to carts from multiple
vendors and check out whenever they want.
Seghal said eBay Express offers an alternative to auction shopping
and could help the site gain new users and meet its goals for growth.
But Seghal said that growth wouldn’t be worth if it eBay weren’t also
actively protecting their revenue from auction
shopping.
He said eBay did that effectively in July then it raised Store
Inventory listing fees in an attempt to lure vendors and users back
into auction shopping where eBay earns higher margins due to faster
turnover.
Given yesterday’s better-than-expected financials, call that
incentive play a savvy move. Just don’t call it mature.
