EBay Takes A Dive As Pay Pal Soars
Overnight EBay said sales for 2014 won’t meet its prior estimates, as the last three months of the year will be tougher than thought.
EBay forecast revenue of less than $18bn for the year, sending shares in aftermarket trading down 3%.
The online retailer previously expected revenue of as much as $18.3bn.
An analyst in the UK told ChannelNews said that eBay started off being the location where consumers went to shop for cheap deals “now mass retailers are using eBay traffic to flog goods at close to full price”.
EBay revenue for the three months ending 30 September increased 12% to $4.4bn, compared to the same period in 2013, said the firm.
EBay is planning to split off its payments system PayPal into a separate company.
“PayPal had another strong quarter, and its mobile payments leadership and momentum continued with mobile volume up 72% to $12bn,” said chief executive John Donahoe. “PayPal is on track to process 1 billion mobile transactions in 2014.”
A split is a reversal of strategy for the company, which has previously resisted pressure to split. However, Mr Donahoe has said the logic for running the companies jointly had changed.
PayPal’s revenues are growing at 19% a year, twice as quickly as eBay’s.