EBay Shows Signs That the Worst May Be Over
BusinessWeek, Thursday, July 23, 2009 2:50 PM
EBay looks to be headed in the right direction under CEO John Donahoe, BusinessWeek's Douglas MacMillan reports, as the ecommerce giant delivered slightly better than expected second quarter earnings Wednesday. While second quarter sales declined 4%, earnings of 37 cents per share, excluding special items, beat Wall Street analysts' consensus estimate by a penny. Total revenues for the quarter were $2.1 billion, compared with $2.2 billion a year ago. Net income was $327.3 million, vs. $460.3 million in 2008. EBay shares gained nearly 5% in after hours trading on Wednesday.
"I knew the eBay turnaround was going to take over three to four years, and the first 18 months of a turnaround are always the hardest," Donahoe said in an interview. The former Bain & Co. consultant took the helm at eBay last year, laying out a long-term plan that included shuttering weak businesses and focusing on the creation of a one-stop shopping site where buyers could bid in auctions, peruse classified ads, or buy products outright. "This is good, steady progress," Donahoe said of the second-quarter results.
Among the key changes implemented by Donahoe: improved search functionality and the elimination of certain fees eBay charged merchants for putting items up for sale. Other bright spots included 11% growth at PayPal, eBay's online transaction business, and 25% revenue growth at Skype, the Voice over Internet Protocol provider eBay is planning to spin off sometime in the next year.
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"I knew the eBay turnaround was going to take over three to four years, and the first 18 months of a turnaround are always the hardest," Donahoe said in an interview. The former Bain & Co. consultant took the helm at eBay last year, laying out a long-term plan that included shuttering weak businesses and focusing on the creation of a one-stop shopping site where buyers could bid in auctions, peruse classified ads, or buy products outright. "This is good, steady progress," Donahoe said of the second-quarter results.
Among the key changes implemented by Donahoe: improved search functionality and the elimination of certain fees eBay charged merchants for putting items up for sale. Other bright spots included 11% growth at PayPal, eBay's online transaction business, and 25% revenue growth at Skype, the Voice over Internet Protocol provider eBay is planning to spin off sometime in the next year.
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