No surprises with Q3 results given EBAY had already 'warned' us about the numbers. Top-line growth has slowed to 12.0%. In the grand scheme of things, growing at around 12% Y/Y in the current economic climate is not so bad, but...... if EBAY's Q4 guidance is anything to go by, its about to get much much worse. EBAY now forecast Q4 revenue of $2.10 billion. That would bring Y/Y growth into

Having significantly lightened my position in EBAY after their mediocre Q2 results back in July, I have not been following the company as closely (hence the relative lack of posts). That said, EBAY spared me the trouble of forecasting Q3 revenue by pre-announcing (should read 'warning') Q3 revenue of around $2.12 billion. This is pretty disastrous. It means Y/Y growth in revenue has fallen to

EBAY has unveiled a new ecommerce marketplace called WorldofGood.com, which "offers products that have a positive impact on people and the planet, empowering consumers to align their social values with their shopping." This is an interesting approach to a new market niche that also has the potential to enhance EBAY's image as a socially-friendly organization. I've always thought expanding via

PayPal announces that Continental Airlines is the next airline to integrate PayPal as an alternative payment method. As the fifth largest airline in the world, this is yet another major account win for PayPal. Other airlines accepting PayPal include Delta, JetBlue, AirTran, Monarch, Midwest, Northwest, Southwest, and US Airways.

Moving toward traditional retail As anticipated, eBay announced a new fixed priced listing format with significantly lower upfront fees ($0.35 for a month listing) that is better suited for retailers looking to use eBay as a channel for new goods, plus other changes to payments and shipping requirements. In the US the new format will be in addition to the auction and stores format and will

More interesting developments for EBAY's legal team. Tiffany, as expected, announced that it will appeal a federal judge's ruling in favor of EBAY last month. And in other news, a Belgian court dismissed claims by L'Oreal over the sale of fake fragrances and cosmetic products on EBAY. L'Oreal is also expected to appeal.

So news emerges that EBAY is in discussions to acquire a minority stake of around 37% in Gmarket. This makes a lot of sense to me. First, the plan fits perfectly into EBAY's expansion through partnership model. Second, even though EBAY's existing wholly-owned aucion.co.kr platform in Korea is suppose to be doing reasonably well, Gmarket has the momentum and is more likely to become a major

July retail sales at discount retailers including Wal-Mart and Target have come in below expectations and don't point to a particularly bright 'back-to-school' season. Both companies have provided cautious outlooks for August. Wal-Mart reported July same-store sales up only 3.0% in the US. Target reported July same-store sales down 1.2% in the US. This is bad news for EBAY, for which the '

With the exception of Amazon, its been a tough July for internet bellwether stocks. EBAY hit a new low for the year, Yahoo hit lows not seen since immediately prior to the Microsoft bid, and Google lost enough for it to continue being the worst performer of 2008. Amazon actually gained a little in July although it's still underperforming the Nasdaq index for the year (together with the rest of

E-commerce is slowing down much more than previously thought. According to comScore, Y/Y growth was down to 11% in June. And that includes the effects, if any, of the government’s economic stimulus checks mailed in May. On one hand, this is bad news for EBAY. They are competing in a slower growing market. On the other, it does show that the slowdown in EBAY GMV growth is not entirely an

Quite a bit of news around online payment processing in the last few days. In my opinion, the high level of activity and competition in the sector is very healthy and underscores the attractive fundamentals of alternative online payments. So here is what the 'PayPal killers' have been up to lately. Amazon re-launches yet another attempt at online payments called, unsurprisingly, Amazon

EBAY have announced a partnership with Germany's national railroad in which over a million train tickets will be sold on the EBAY marketplace. With EBAY recently making incredible progress in the airline and automotive sectors, this deal could be indicative of yet another niche sector with traction potential.

To complete my sum-of-the-parts valuation I need consider EBAY's cash and minority interest positions. At the end of Q2, EBAY had $3.7 billion of cash and cash equivalents and is on track to generate another $1.3 billion before the end of the year, bringing the 2008 cash total to $5.0 billion. EBAY also has several important minority stakes including ~20% of MercadoLibre, ~25% of craigslist,

Marketplaces is a collection of properties across increasingly diversified e-commerce channels and monetization models. The division includes everything from traditional GMV-based marketplaces (ebay.com, stubhub.com, half.com etc...) to pure advertising-based businesses like comparison shopping sites (shopping.com) and online classifieds sites (kijiji.com, gumtree.com, etc...). Notwithstanding

Skype had an encouraging Q2. Of the various publicly available metrics, the two most important are concurrent users (as a proxy for active users) and Skype-Out minutes (where Skype makes most of its revenue). Both of these metrics displayed a second consecutive quarter of accelerating growth in Q2, and now hover around the 40% mark. Skype had Q2 revenue of $136 million and is on track to reach

PayPal had Q2 revenue of $602 million and is on track to reach 2008 revenue of $2.5 billion and somewhere around $3.3 billion in 2009. This implies a 2009 top-line growth rate of 32% which would be a modest deceleration from current rates and assumes PayPal will continue to be able to counterbalance lower growth rates on-EBAY with an ever-increasing proportion of business coming from Merchant

Shares of EBAY gained over 4% yesterday on the back of a Goldman Sachs report that claims the first three weeks of July show listings growth at over 17% Y/Y. Analyst James Mitchell, who recently took over from Anthony Noto, must have missed the Q2 results that show listings growth has become a relatively poor indicator of anything. Total listing metrics were useful when conversion rates and

With sustained growth rates near 60% Y/Y, PayPal Merchant Services has become a major pillar of growth for EBAY. In last week's Q2 report, the percentage of PayPal TPV from Merchant Services was already up to 49%, which means that sometime this quarter, PayPal Merchant Services will officially overtake PayPal on-EBAY in TPV. And there is still plenty of room for growth. As of Q2, only 32 of

Having had a few days to look over EBAY's Q2 results (download presentation here), I am starting to think the results appeared worse than they really were. For me, the biggest red flag was seeing overall GMV Y/Y growth drop to 8% (from 12% in Q1). In reality, if you look at the GMV per category, the drop was caused almost exclusively by a very poor EBAY Motors. EBAY Motors was the second

The EBAY share price is down 10-14% in early trading, and frankly, I'm not surprised. EBAY's main source of earnings, its Marketplace business, showed a dramatic slowdown in Q2. Automotive sales are perhaps the biggest culprit in the GMV slowdown but weakness was pretty widespread, including the "allegedly" stronger international sites.