eBay held its annual financial analyst conference yesterday with the theme of "Power of Three," focusing on eBay, PayPal and Skype. eBay referenced the success of integrating PayPal on eBay and said similar success would come from integrating Skype into its eBay and PayPal services. (See "eBay to Integrate Skype and Introduce Online Advertising Service," http://auctionbytes.com/cab/abn/y06/m05/i04/s00).
"Across all of our businesses, we see greater opportunities for future growth than ever before," said Meg Whitman, President and CEO, eBay Inc. "Each of our brands is the global leader in its space and well positioned to pursue new opportunities and accelerate growth. Together, they're working to turbo charge one another. Our multi-brand strategy is opening up entirely new vistas of opportunity for the company."
eBay executives summarized the strength of the Marketplaces business, which includes eBay, Shopping.com, and classifieds websites. In the first quarter of 2006, eBay's Marketplaces delivered more than $1 billion in revenue for the first time. In Europe, eBay is on track to be a bigger business than it is in the United States, while Asia remains eBay's fastest growing region with tremendous long-term potential.
The company previewed eBay Motors 2.0, a new tailored shopping experience that will offer the best of eBay Motors' national marketplace combined with a local offering.
PayPal's management team reviewed the performance of the online payments service, which saw the first quarter of 2006 end with more than 105 million accounts worldwide and $8.8 billion in total payment volume. Executives described the three global business opportunities being pursued by PayPal: payments on eBay Marketplaces, Merchant Services, and areas beyond online payments. Executives recapped the April launch of PayPal Mobile, which offers person-to-person, text-to-buy and text-to-give functionality.
Skype executives detailed their success to date, highlighting that Skype recently surpassed the 100 million mark for registered users. "Rapid product innovation in areas such as Skype Video and Web presence, a robust infrastructure and a thriving ecosystem of hardware and software developers, have created a sustainable leadership position for Skype in the online communications industry." They said deeper integration with eBay and PayPal can increase usage of Skype
Executives described how Skype can help facilitate trade on eBay, especially in high involvement and high-price categories, such as Motors, Business & Industrial and Real Estate. Early efforts, such as the inclusion of SkypeMe buttons in listings on several international eBay sites, are showing promising results.
Combining Skype and PayPal also opens up new opportunities, eBay said. PayPal has already embedded its service into Skype payment flows, making paying for Skype services easy, which can boost Skype's revenues and increase PayPal's payment volume, while accelerating adoption of both offerings. Executives previewed several deeper integration ideas between the two businesses. Building Send and Request Money functionality into the Skype client and giving a PayPal Wallet to every Skype user are two concepts that could help cement PayPal's position as the preferred way to pay for millions of Skype users.
eBay Inc. CFO Bob Swan reviewed the company's economic model, detailing the financial objectives for each of the three businesses. For eBay Marketplaces, growth will be driven by expanding the core business, entering into new in-season product markets and monetizing classifieds platforms. PayPal growth will be driven by adoption on eBay around the globe, Merchant Services, and the expansion beyond online payments. Skype's growth will come from acquiring new users, enhancing the product offering, improving monetization and building out its developer ecosystem.
