The decline in year-over-year gross merchandise volume at eBay Inc. continued for a second quarter, the company reports. Gross merchandise volume, that is, sales by registered sellers, in the first quarter slid to $10.79 billion, down 16% from $12.86 billion in last year’s first quarter. While quarterly year-over-year growth in gross merchandise volume had slowed throughout 2008, it fell in the fourth quarter for the first time.
Auto sales on eBay fell by 35% quarter over quarter to $2.07 billion from $3.16 billion, the third straight quarterly decline.
Active users barely grew in the past year, reaching 88.3 million in Q1 vs. 88.2 million a year earlier.
The recessionary economy and consequent decline in sales at eBay took their toll on eBay revenue and earnings. First quarter revenue was $2.02 billion, down 7.8% from $2.19 billion a year earlier. EBay blames the decline on the fall in eBay’s Marketplace business, which is where the buying and selling that eBay is known for takes place, and the strengthening dollar vs. overseas currencies. EBay reports that its PayPal, Classifieds and Skype units all delivered year-over-year revenue growth.
Net income fell to $357.1 million from $459.7 million.
“We delivered solid results in the first quarter and moved aggressively to strengthen our portfolio for longer-term growth,” says eBay 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 e-commerce and online payments businesses.”
Q1 revenue in eBay’s Payments unit increased 11% from the prior year to $643.0 million. Payment volume through the eBay processing network was up 10% to $15.86 billion. The increase was the result of growth of the PayPal Merchant Services business and the acquisition last October of Bill Me Later, which enables online retailers to offer promotional financing. The company reports that increases in PayPal penetration on eBay helped offset the decline in PayPal transactions created by the fall in gross merchandise volume.
Revenue for the Marketplaces business unit, which consists of eBay, Shopping.com, StubHub, Kijiji and other e-commerce sites, fell 18% year-over-year to $1.22 billion. Approximately 54% of eBay’s Marketplaces revenue came from outside of the U.S. Fixed-price trading on eBay’s Marketplace grew 12% in the first quarter and now accounts for 49% of gross merchandise volume in Q1 vs. 42% a year earlier.
Online classifieds revenue increased 23% year over year.
Q1 revenue at Skype, eBay’s online telephone service, grew 21% to $153.2 million. Skype added 37.9 million users during the quarter and ended the period with more than 443.2 million registered users. Last week, eBay announced plans to separate Skype into an independent company commencing with an initial public offering during the first half of 2010.
In a call with analysts Wednesday afternoon, Donahoe said eBay expects growth slower than the market this year, with the market in 2010 and faster than the market in 2011.
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