Although eBay beat its downwardly-revised earnings numbers today, its earnings call was filled with glum news for investors. (Full earnings slides embedded below). After three flat quarters, revenues declined 3.6 percent from the second quarter to $2.2 billion. Free cash flow has been going down each of the last four quarters, and so has the total value of goods traded over the auction and e-commerce site. eBay is leaning much more heavily these days on merchant-dominated categories like autos than on auctions between ordinary people.
Even PayPal’s revenues were flat in the quarter at $597 million. Maybe the $945 million acquisition of Bill Me Later will help reignite growth. Its classifieds business (Kijiji) brought in a respectable $250 million in revenues.
Another eBay business that is holding its own, surprisingly, is Skype. Revenues for the third quarter were $143 million. Although its growth rate is slowing, at least it is still growing, both on an annual (46 percent) and sequential quarterly (5 percent) basis. Its total registered users grew 51 percent to 370 million, and those people used up 16 billion minutes of talk time.
The annual growth rate of those minutes ((63 percent) is actually accelerating compared to the preceding quarters. And, most important of all, the number of minutes people actually pay for (2.2 billion Skype Out minutes) is also experiencing accelerating growth (54 percent).
Unfortunately, at only ten percent of eBay’s total revenues, Skype is still too small to counteract its overall decline. Maybe they can still sell it.
Awesome news. Skype is a good app, and I’m happy for them because eBay has made some big PR mistakes, and everyone looks at Skype as the ugly duck.
I’m pretty sure that eBay now thinks that Skype could be a solution with proper advertising.
eBay should buy these guys – http://www.puddingmedia.com and integrate their technology in to Skype, I think that would increase Skype revenues substantially and attract a lot of advertisers.
wow ebay wants to sell all their acquisitions. here is a clue maybe you need to fired and get a new acquisition team.
I can’t imagine eBay struggling
Any idea what costs are like for Skype?
I believe I’ve read they’re “profitable”, but I’d be curious to hear how much of the 16b minutes of talk time and supporting infrastructure eat into that $143mm.
This is interesting news; Ebay struggling?
Oh no this is very sad. Ebay is struggling?
Skype is a great business. I’m sure eBay has big plans to monetize Skype further.
I wonder what the future of traditional telephones be with the new technology companies like Skype.
I also don’t think eBay will have a hard time during this economic crisis compared to other large internet companies.
How did you come to this conclusion? Its classifieds business (Kijiji) brought in a respectable $250 million in revenues. I don’t see anything in the slides or earnings release.
I don’t see any reports about it on the net, I know they bought a lot of classifies businesses like gumtree but kijiji itsself has no ads that I can see and its entirely free ?
How in the world is Kijiji bringing in $250M in revenues?!?!?! Every classified ad is free… are they REALLY bringing in $250M in strictly ads? I don’t believe it…
Everyone laughed when News Corp bought Myspace for $580mm and now it is their crown jewel–or one of them anyway.
wrong thread
Agree with Markus. The classifieds revenue does not refer only to Kijiji.
Oh! so sad news.
http://www.oxyshopping.com
Facebook should buy skype
The $250 Million in classifieds revenue is just dead wrong. If classifieds did half of what PayPal did in revenue for the quarter that would not be ‘respectable’ but TRULY AMAZING. It’s no more than 4 years that they got into the classifieds space in a real way. I don’t know what the number is but $250 Million for the quarter is 150% wrong.
I have to add my voice to the chorus about Kijiji’s revenue.
While I flat out don’t believe this figure, they are getting a decent amount of traffic, and it appears to be from organic search –
http://siteanal....com/?metric=uv
Erick – Do you know how many of the 370M users pay for any service?
Commercial listings have long since taken over and it has become increasingly hard to find actual auctions from regular casual users. They seem to drive people away who look to ebay for auctions and that in turn is causing the overall decline as nobody is really seeking out ebay for anything else? So this change of focus might me a bit short sighted.
During the process of working on our new social application we had to have some help from paypal with some of the integration that we are doing, and they were great !!!!!
We have are creating an open source social app that has an e-commerce and micro payment service built into it.
eBay could build on their base by supporting Linux better. The linux cilent is several years behind the Windows client in terms of features and user interface.
One feature in the Windows Skype client is the ability to send SMS to mobile phones, with the charge coming from my prepaid Skype balance. That feature is AWOL in the Skype for Linux client.
Video is another feature lacking in the Skype for Linux client.
I would consider running Skype under Windows XP running in a virtual machine (Sun’s VirtualBox) … but that crashes on startup. Not sure if problem is Skype client or VIrtualBox, but if eBay were to pay attention to linux they could fix this …, wherever the problem lies.
Erick are you going to give us an answer as to the figures for Kijiji??
That just doesn’t seem possible. Craigslist must be making an absolute fortune then.
A great alternative to ebay:
http://www.bonanzle.com
Hardly, but it is well-spammed!
So finally the downfall of ebay started and even skype can’t save that ..hmm
the current economic crisis have really bad impacts on all the industries ..
I’d like to set the record straight and clear up any questions in regard to our recent earnings statement that includes our Classifieds business. The $250 million in revenue refers to eBay’s Global Classifieds business, which includes the following seven brands: Kijiji, Marktplaats, Gumtree, LoQuo, mobile.de, and most recently, Den Bla Avis and BilBasen. eBay’s global portfolio of classifieds sites garners 84 million unique visitors per month, 4.5 billion page views and 16 million live listings.
Just give SKYPE some time and It will grow past ebay! I am working from an internet cafe in Springfield, Missouri – am a native of Stockholm, Sweden and call my friends and colleges in Sweden, US and Mexico UNLIMITED minutes for under $20/month!
Skype ROCKS!