Ebay’s mobile and marketing drive sparks revenue spike
Ebay has posted a 13 per cent jump in revenues for its latest quarter, fuelled by the growth of its mobile commerce business, increased marketing spend and ongoing work with retailers to target shoppers.
The online seller generated $4.35bn (£2.6bn) for the three months to 31 December, up from $3.99 billion (£2.4bn) in the same quarter last year. Revenue grew 14 per cent for the full year.
The growth was helped in part by an increase in sales and marketing spend over the festive period. Sales and marketing spend rose 5.6 per cent to $837m (£504m) in the quarter, and 4.8 per cent to $3,060m (£1.8bn) for the full year.
The business says it saw “strong” growth across its four competitive battlegrounds – mobile, local, global and data – over the last 12 months. Mobile “exceeded expectations” for the full year with sales volume growing 88 per cent adding more than 14 million customers. Mobile users represented 40 per cent of eBay’s 36 million new users and accounts in 2013, the business says.
Ebay Enterprise, the company’s marketing service for running online portals for brick and mortar retailers, posted an 11 per cent year-on-year rise in merchandise sales in the quarter. Revenue for the year rose 14 per cent to $4.2bn (£2.53bn). The earnings were spurred by the business offering high-street stores online shopper data to give them access to the shopping habits of individual customers in real-time. The service launched across North America last year and will roll out to the UK before the end of 2014.
The earnings were also boosted by PayPal, which saw revenue jump 19 per cent in the quarter and the full year. In turn, Paypal accrued 5.2 million users in the quarter and ended 2013 with 143 million users, a 16 per cent increase. The business says “PayPal and eBay together create an incredibly strong global commerce ecosystem” for consumers and merchants, adding it continues to “see tremendous growth opportunities ahead.”
John Donahoe, president and chief executive of Ebay, says: “We feel good about our performance and strong finish in the fourth quarter, with the holiday shopping season clearly showing how online, mobile and other omni-channel commerce capabilities are changing how consumers shop and pay.”
The company also revealed it has received a notice from investor Carl Icahn to spin off the Paypal business. EBay, however, says it has previously explored the idea and does not believe it is in the best interest of shareholders.
