International community and global growth were the central messages yesterday at eBay’s annual financial analyst conference, during which the company outlined its strategy for growth.
At the meeting, officials of the San Jose, Calif.-based online auction giant reaffirmed the company’s financial goals for 2003 and 2004, and provided a long-term view of the business and its payment strategies.
The conference came just ten days after eBay released its earnings report for the third quarter. In that report, eBay declared that profits leaped to $103.3 million, or 16 cents per share, in the quarter that ended Sept. 30, for a 69 percent increase in profits and an 84 percent increase in revenue to $530.9 million.
This week, at the analyst conference, the focus was on strategy, both in the U.S. and abroad. To a crowd of a few dozen analysts, eBay President and CEO Meg Whitman highlighted key opportunities for growth, and reiterated the company’s ongoing commitment to disciplined investment for the long term.
“eBay is an always will be dedicated to its community,” Whitman said. “The fact that we continue to empower millions of people to thrive in an open marketplace gives me tremendous confidence in the future of business.”
Whitman explained that here in the U.S., eBay will focus its business on new user acquisition, user activation, and ongoing user activity, citing category management, Web site features, online merchandising and marketing as key levers in achieving these goals. She also highlighted well-established categories such as eBay Motors, targeting this component of the company as one that she plans to grow in the coming months.
Overseas, Whitman said the company plans to continue its growth in North America, Europe and Asia. She called attention to eBay Germany and eBay United Kingdom, the company’s top two international Web sites, and touted the success of the European market overall, noting that over the next few years, European operations along could grow as large as the U.S. Business.
Among analysts, reaction to the forecast generally was positive, but some still were hesitant to lavish kudos on the company just yet. Gene Alvarez, vice president of technology research services at Meta Group in Stamford, Conn., said the future looks bright for eBay, but warned that the company must be careful not to alienate its European business partners as it expands.
“Globalization is the next logical path for growth, they do have to be cautious,” Alvarez told internetnews. “So long as they don’t make the typical mistake of thinking that the rest of the world behaves as the U.S., I think they should be able to localize their business model overseas and bring the community flavor to auction sites everywhere.”
Alvarez also noted that eBay’s success overseas could hinge upon how the company continues to leverage the PayPal online payment service. eBay acquired PayPal in October 2002, and since then, the service has unveiled a localized payment service in the United Kingdom. At the conference, Whitman said she expects to grow PayPal services across eBay’s other international Web sites, and to champion further penetration of PayPal transactions on eBay in the U.S.
