eBay Generates $13B In Mobile Revs
Improvements in site search options and mobile apps made it easier for eBay merchants to sell and consumers to buy goods and services in 2012, according to the company, but the changes appear to bypass searches on engines.
eBay has been generating more revenue from consumers shopping on tablets and smartphones. In fact, the company reported mobile transactions doubled in 2012 to $13 billion.
Bob Swan, SVP of finance and CFO at eBay, said during the company's earnings call that traffic to the site continues to grow. He noted that traffic on a mobile device tends to come directly to the site, rather than referred from search engines or social sites.
The company reported generating free cash flow of $1.1 billion in Q4, with CapEx at 7% of revenue primarily due to investments in search, data and site operations
Recently, eBay made improvements to its search engine to better incorporate user behavior and purchase data to improve conversion rates, according to analysts.
Earlier this month, eBay explained several updates to its iPhone and iPad apps, giving consumers a faster and easier experience for buying and selling from mobile devices. The company made improvements to the auto-complete search feature and shortened the checkout procedure to accommodate the small screen. The apps also allow users without PayPal accounts to make purchases with a guest checkout feature.
Some 1.8 million new customers joined eBay through a mobile device in the first three quarters of 2012, per the company, which boasts on average the addition of 2.4 million listings to eBay Mobile weekly.
While mobile apps tend to remove consumers early in the exploratory stage, marketers need to remember that research remains an important part of the buying process. Most research for products is done on search engines and shopping sites.
eBay may change the search process, but marketplace risks exist, according to Robert W. Baird analyst Colin Sebastian. The company faces "strong competition from Amazon," which he says is growing at a faster rate, although the two have a slightly different business model and their customer bases don't entirely overlap.
Sebastian mentions that eBay also competes with Google. Its paid search business provides an alternative model for eBay sellers.