Wednesday, April 19, 2006

Ebay's latest quarter disappoints

Ebay's latest quarter disappointed investors as their profits went up only 4% on a year ago. But revenues soared, helped by a strong performance from PayPal.

Sales rose to $1.39 billion, up 35% from a year earlier, as revenue from eBay's online payments service, PayPal, rose 44%. That business now contributes a quarter of eBay's total revenue, while the majority of its sales come from its online marketplace.

Ebay was hit by a bunch of stock option charges. And it may be that the auction business is heading for a period of steadier, less heady growth. Ebay's acquisitions of PayPal and Skype may prove more important than anyone imagined to help going forwards.

And competition from the Google, Yahoo and Amazon is increasing. International epxansion may also prove more crucial than ever for Ebay.

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