EcommerceBytes-NewsFlash, Number 2206 - January 21, 2010     1 of 2

eBay Q4-2009 Revenue Up, But Marketplace Turnaround Uncertain

Email This Story to a Friend

eBay posted fourth-quarter revenue of $2.4 billion, up 16% from the same period last year. Excluding Skype from the fourth quarter of 2008 and the fourth quarter of 2009, revenue growth would have been 19%. eBay called PayPal's performance "exceptional," and eBay's international marketplaces performed better than its U.S. site, accounting for approximately 60% of Marketplaces revenue for the fourth quarter. Asia-Pacific is eBay's fastest growing region.

eBay's CEO is in the middle of a multi-year effort to "fix" the eBay Marketplaces business, but Wall Street analysts said eBay's Q4 performance was inconclusive of a turnaround. Mr. Donahoe referred to the marketplaces' fourth quarter performance as "turnaround progress and momentum."

  • U.S. non-vehicle GMV grew 4% in Q4.
  • Excluding Gmarket, which eBay acquired in the spring of 2009, and excluding the effects of currency exchange, total eBay non-vehicle GMV grew 8% in Q4 year-over-year.
  • Fixed-price non-vehicle GMV grew 18%, and auctions fell by 3%, in Q4 year-over-year (FX-neutral, excluding Gmarket).
  • Active users on eBay marketplaces grew 3% year-over-year to 90.1 million users. (All users, excluding users of, StubHub, and Korean subsidiaries, who bid on, bought, listed or sold an item within the previous 12-month period. Users may register more than once, and as a result, may have more than one account.)
  • The Payments business unit reported $795.6 million in revenue for the quarter, an increase of 28% year over year, with 46% of payments net revenue coming from international. Net total payment volume (TPV) for the quarter was $21.4 billion, an increase of 34% year over year.

eBay Inc. revenue for the full year 2009 was up 2% from 2008 to $8.7 billion, and the company reported net income of $2.4 billion. eBay said its Marketplaces business plans to continue to focus on trust, value and selection in its core business to drive GMV growth, and on format expansion.

The Gmarket Effect
eBay's acquisition of South Korean marketplace Gmarket contributed greatly to GMV growth rates after Q1. Slide 11 in eBay's presentation to analysts shows FX-neutral non-vehicles growth rates for fixed-price GMV at 35% in Q4, but excluding Gmarket, it would have been 18%.

Classifieds, Advertising, Other
eBay said its classifieds business was up 20% year-over-year, or 9% FX-neutral. Page views were up 8% year-over-year to about 5 billion, while unique visitors were flat at 85 million.

Advertising was up 3% and down 5% FX-neutral; eBay said it had removed banner ads at the top of search pages.

"Shopping/Rent/Other" was up 7% or up 4% FX-neutral. revenue from merchant leads strengthened, but was offset by continued weakness in sponsored link ad revenue.

Analyst Uncertain of Marketplace Turnaround
For analysts looking for signs of a turnaround in eBay marketplaces, the fourth quarter proved inconclusive. Mark S. Mahaney of Citigroup wrote that it was "still unclear whether eBay is a turnaround story and can grow its Marketplaces in-line with overall ecommerce growth rates in '10." (Link to report in PDF format .)

Piper Jaffray & Co. analyst Gene Munster told the Wall Street Journal that the turn-around was well within eBay's grasp, but said it was hard to distinguish how much of eBay's growth was coming from the company's own changes versus overall growth in ecommerce.

Colin Sebastian of Lazard Capital Markets said of the fourth quarter results, "we believe the results support our thesis of a gradual turnaround taking place at eBay."

Update: Sandeep Aggarwal of Collins Stewart LLC wrote, "As we expected, eBay reported a Beat & Raised Q continuing the path of providing very compelling evidence of a sustainable turnaround in core Marketplaces and highlighting the astronomical growth potential in its Payments biz." (Link to report in PDF format)

eBay Inc. President and CEO John Donahoe said, "We delivered a strong fourth quarter with double-digit revenue growth driven by exceptional performance at PayPal and turnaround progress and momentum in our core eBay business. PayPal significantly expanded its presence globally and, for the first time, processed more than $20 billion in total payment volume in a quarter. Gross merchandise volume and sold items accelerated for the third consecutive quarter. We are starting 2010 with significant progress against our three-year growth strategies for PayPal and eBay and a clear focus on our priorities going forward."

Comment on the AuctionBytes Blog

Updated at 2:30 pm to include Collins Stewart analyst report.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

You may quote up to 50 words of any article on the condition that you attribute the article to and either link to the original article or to
All other use is prohibited.