• Business Week, Friday, July 20, 2007 11 AM

Wall Street shrugged as eBay on Wednesday reported 50% profit and strong revenue growth in the second quarter. Why? Because eBay is having a hard time adding new customers, and while earnings per listing may have grown, overall listings fell 6%. CEO Meg Whitman dealt with the issue by claiming that an improved user interface is in the offing.

But it was still a strong quarter for the Web giant, as the total value of sales on the site grew 12% from the year before, to an impressive $14.4 billion, in part thanks to strong ad sales. Net income grew 50% to $376 million, and sales rose 30%t, to $1.83 billion. PayPal, the online payment unit, also grew 24% to 454 million. Said Whitman: "this was one of our best quarters in the last several."

Indeed, eBay beat the Street and raised its outlook, but investors didn't care, as the stock fell 2% in after-hours trading. Aaron M. Kessler, senior research analyst at Piper Jaffray, explained that the stock had risen about 10% going into the quarter. "The last couple of weeks people had increased their expectations, so these results just confirmed that," he said.

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