eBay reported financial results for the first quarter ended March 31, 2009, posting revenue of $2.02 billion, a $171.6 million year-over-year decrease it said was caused "primarily by the impact of the stronger dollar and the decline of the core Marketplaces business in difficult macroeconomic conditions." In a conference call with analysts on Thursday, eBay CEO John Donahoe said eBay Marketplaces revenue was down 18 percent year-over-year, with foreign exchange accounting for 10 points of that decline.
Donahoe said eBay continued to see a "format migration" - the Fixed Price format grew 12% during the quarter, "significantly faster than ecommerce," and accounting for about half of eBay's GMV. Auction format declined 20 percent, and online classifieds revenue increased 23% year-over-year.
eBay seems to have removed two previously reported metrics from its earnings press release under the "Unaudited eBay Marketplaces Supplemental Operating Data": number of new listings, and the number of Stores.
The Marketplaces business unit, which consists of eBay, Shopping.com, StubHub, Kijiji and other ecommerce sites, recorded $1.22 billion in revenue. The revenue drop was attributable to the impact of the strengthening dollar and the decline of the core business in difficult macroeconomic conditions, according to the company.
Approximately 54% of Marketplaces revenue came from markets outside of the U.S. Gross Merchandise Volume excluding vehicles was $10.80 billion for the quarter, a decrease of 16% compared to the first quarter of 2008.
PayPal, Classifieds and Skype performed well, delivering year-over-year revenue growth. Text and graphical advertising revenue was flat as compared to the prior-year quarter.
The Payments business unit reported an increase of 11% year-over-year. Continued increases in PayPal penetration on eBay helped offset the negative impact of addressable gross merchandise volume (GMV) on revenue and TPV. Active registered accounts reached 73.1 million, an increase of 22% year-over-year. According to eBay's press release, the Payments business will continue to focus on the acquisition of new merchants, greater penetration into the Marketplaces business and the growth of Bill Me Later.
"We delivered solid results in the first quarter and moved aggressively to strengthen our portfolio for longer-term growth," said eBay Inc. President and CEO John Donahoe. "With a macroeconomic environment that remains challenging, we are focused on operating discipline and strong execution of our three-year growth priorities in our core ecommerce and online payments businesses."
Link to eBay press release
Link to Conference Call Transcript from Seeking Alpha
Interesting quotes from eBay CEO John Donahoe during Conference Call:
Regarding eBay's messaging about the liquidation opportunity mentioned at Analyst Day: "What "secondary market" was is a label that attempts to capture what we view as our sweet spot."
On classifieds and whether new formats cannibalize existing formats: "Our whole strategy in ecommerce is to have these complementary formats, and if classifieds grows more quickly than another format, that's okay as long as buyers and sellers connect successfully. Same thing on the seller side. We see sellers that sell both in classified and in the marketplace."
Regarding free shipping, roughly 40 percent of ecommerce offers free shipping, while 30 percent of eBay listings offer free shipping: "Our strategy, consistent with our philosophy, is not to dictate it but give incentives and rewards for sellers to make the right tradeoffs.""
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