
EBay Inc. (
NASDAQ:EBAY), which plans to lay off
several dozen people, will report third-quarter earnings on Wednesday with the
Webcast earnings call scheduled for 2:00 p.m. PT. Analysts are projecting a sliver of growth instead of declining revenue, which eBay has faced for a year. They
project earnings of 37 cents on revenue of about $2.14 billion compared to last year's third-quarter numbers of 38 cents and $2.12 billion.
EBay is making strides to make its site uncluttered and refocus on its core e-commerce business, positioning itself well for what looks like an economic upturn. Collins Stewart LLC's Sandeep Aggarwal has a buy rating on eBay, with a target of $29. The stock has showed improvement since March -- as has the rest of the market -- having dipped as low as $9.91 to closing at $24.49
on Friday.
While PayPal is strong, the marketplace business is where eBay gets most of its profits, and the San Jose, Calif., e-commerce giant is working toward growth there. Aggarwal wrote in a research note:
We believe that addressing/correcting the structural problems of Marketplaces (e.g. legacy auction bias) is a key step towards
unlocking value in the stock. We believe that free shipping, merchant
quality, changes in search, higher selection, TRS (top-rated seller) and buyer protection
are enhancing the value proposition of eBay Marketplace. We believe
that the transformation in eBay's Marketplaces has negative bearing for Amazon.com Inc. (NASDAQ:AMZN).The Wall Street Journal says analysts will also be watching closely the company's
gross merchandise volume, or GMV, which represents the total value of all goods sold over the site. The Journal quoted a line from a Bank of America Merrill Lynch research report by Justin Post from Oct. 5 saying the removal of high-margin advertising and annoying feature fees from the site and additional spending on marketing to add users is a reasonable strategy, driving consumers to an improved eBay.
Refocusing on e-commerceDuring boom times, eBay experimented with different businesses but decided to reverse course and get rid of what was not part of its core.
The deal everyone's watching right now is
eBay's sale of 65% of VoIP company Skype to an investor group led by Silver Lake that includes Index Ventures, Andreessen Horowitz and the Canada Pension Plan Investment Board for about $2 billion. The sale is in danger as
Skype is being sued by its co-founders to stop using -- or make some serious concessions in the suit -- a technology that Skype basically runs on. Here's
the latest on that legal wrangling.
Earlier in the year, StumbleUpon, acquired by eBay two years ago for $75 million, parted ways with the online auction giant as it returned to the ranks of an investor-backed startup. It cited a
lack of synergies. It was also suggested that eBay could sell online ticket broker StubHub, which it acquired for about $310 million in 2007. EBay also tried
an interesting deal with General Motors Co. to sell cars on its Web site, but that didn't work out.
Beefing up its core earlier this year, eBay
acquired online retailer Gmarket Inc. for about $1.2 billion, which it combined with its existing South Korean marketplace business, Internet Auction Co.
EBay's M&A strategy has also made it a candidate for our Most Admired Corporate Dealmakers award in the IT sector. See who the
other candidates are and vote at
www.TheDeal.com/CDsurvey. -
Baz HiralalAlso see:Internet M&A watch list
| eBay Inc. |
| Acquisitions |
Date |
Target |
Acquirer |
Deal value ($mill.) |
4/15/09 |
Ebay Gmarket Co. Ltd. |
eBay KTA (UK) Ltd.
(Parent: eBay Inc.) |
$1,210 |
10/6/08 |
Den Blå Avis A/S and BilBasen ApS |
eBay Inc. |
390 |
10/3/08 |
Bill Me Later Inc. |
eBay Inc. |
905 |
1/28/08 |
Fraud Sciences Corp. |
PayPal Inc.
(Parent: eBay Inc.) |
154 |
5/30/07 |
StumbleUpon Inc. |
eBay Inc. |
75 |
1/10/07 |
StubHub Inc. |
eBay Inc. |
310 |
4/24/06 |
Tradera AB |
eBay Inc. |
48 |
4/11/06 |
Sonorit Holding AS |
Skype Technologies SA
(Parent: eBay Inc.) |
27 |
| Total |
$3,119 |
|
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Tell me, what flavor of KoolAid did you drink at John Donahoe's party??? A sliver of growth? What a joke! The amount of revenue lost by the ideas set in motion by that man is incalculable! I would like an estimate of how much he LOST by his crazy disruptive innovation? Anybody got THAT figure? Anybody even think of the business he lost and is still losing? Ask the sellers whose items are hidden in his manipulative search. Ask the sellers who didn't make the TRS program about that cute purple button on the listing pages that omits all but TRS sellers!