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eBay Beats The Street

Like Yahoo, eBay needed big fourth-quarter earnings to hopefully set the tone for a better year than last year. And like Yahoo, it also delivered, sort of. The performance of eBay's PayPal online payment service next to Google's Checkout and Google Base was a big consideration point for Street analysts and reporters this term.

PayPal dominates the online payment market, and it grew a hefty 29% over the holiday quarter, besting analysts' expectations by a half-billion dollars. PayPal's full-year growth was even higher, at 31%. Accordingly, eBay shares skyrocketed 13%.

Over at eBay proper, more product listings translated into higher actual sales. This, in part, came from eBay's decision to raise its fees to roughly 6%, which in turn encouraged merchants to sell more higher-quality items, improving conversion rates.

Sales were also buoyed by a consumer-electronics sector rejuvenated by the entrance of the Nintendo Wii and the Sony PS3; incredible demand for these hard-to-find items lead to astonishing sales markups of 200% to 300%.

Read the whole story at Business Week »

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