eBay reports strong fourth quarter

eBay has reported a strong end to 2009, with revenues for last quarter of the year rising 16% to $2.4bn, including $112m from its former Skype division.

The...

eBay has reported a strong end to 2009, with revenues for last quarter of the year rising 16% to $2.4bn, including $112m from its former Skype division.

The company claimed the year-on-year growth for the quarter would have been even stronger at 19% if the revenue from the recently sold Skype internet telephony division were excluded from the fourth quarter figures for 2008 and 2009.

Net income was $1.36bn for the quarter, which indicates eBay's efforts to turn its fortunes around are beginning to pay off, according to the Financial Times.

eBay's strong results were largely driven by online payments subsidiary PayPal, which reported revenue of $796m for the quarter, a 28% increase on the same period in the previous year.

"PayPal significantly expanded its presence globally and, for the first time, processed more than $20bn in total payment volume in a quarter," said John Donahoe, chief executive at eBay.

Total payments processed through PayPal were $21.4bn in the quarter, and PayPal's off-eBay activity increased by 50% year-on-year.

Analysts said the off-eBay share of PayPal activity grew from 50% to 57%, which will allow the payments business to continue to grow even if eBay's shopping sites lose market share in the face of increasing competition from Amazon and other rivals.

eBay also attributed the strong results to growth in its marketplaces businesses and positive impact from foreign currency movements.

The marketplaces business, which includes eBay, Stub Hub, and Kijiji, recorded $1.5bn in revenue, representing a 15% increase.

eBay's operating margins dropped from 22.3% to 7.6% because of the settlement the company reached with founders of Skype after a lengthy legal dispute.

In November, eBay completed the sale of a majority stake in Skype for $1.9bn to an investment group, including Skype's founders.

Donahoe said that he was "guardedly optimistic" for 2010 and he expects "slow, steady progress in the global economy".

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