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 user 2005-04-23 at 11:18:00 am Views: 49
  • #9074

    EBay sees higher auction profits

    Internet auction site eBay saw profits rise 28%, beating
    expectations, but forecasts for the future were more cautious amid fears of
    slowing growth.

    Profits for the three months to the end of March rose to $256.3m (£134m),
    compared with $200.1m a year earlier.
    Sales rose 36% to $1.03bn from $756.2m a year ago on strong overseas sales as
    eBay launched new auction sites.

    It said the success of its PayPal online payment service also helped to take
    sales over the $1bn mark.

    Overseas growth

    The fundamentals weakened but did not fall off a

    Mark Mahaney, American Technology Research

    In its first quarter, more than half – or 52% – of eBay’s revenues came from

    The company said it will continue to rely on overseas markets, especially
    China, to keep growing.

    It added more new users in China than in any other country and plans to
    introduce its PayPal payment service there.

    It is also hoping to lure new customers in mature markets, such as the US and
    Germany, who haven’t tried buying or selling on eBay yet.

    Meg Whitman, eBay’s president and chief executive, said: “We’re in an
    excellent position to deliver on both topline and profit goals we’ve set out for

    The firm has raised its 2005 sales forecast, predicting that annual revenue
    would come in between $4.27bn and $4.36bn.

    Mature slowdown?

    However, expanding in mature markets is difficult and fears of slowing growth
    have dogged the company since the end of last year when its fourth-quarter
    results showed revenue was not growing as fast as previously in the US and

    That news prompted a one-day fall of 19% in its share price.

    But analysts were not giving up on the auction site, which sells everything
    from cars to invitations to weddings.

    “The fundamentals weakened but did not fall off a cliff,” Mark Mahaney, an
    analyst at American Technology Research, told Reuters.

    Another analyst, David Garritt of Caris & Co, warned that fraud was a

    Ebay said less than 1% of transactions tend to be fraudulent, though
    higher-priced items, like cars or PCs, are most likely to be affected.

    Nearly 100,000 complaints about internet auction fraud, not all concerning
    eBay, were reported to the US’ Federal Trade Commission.

    Separately, the company is considering forming partnerships with mobile phone
    companies and companies offering phone calls over the internet.

    EBay shares rose 4 cents to $31.11 in after-hours trading on the New
    York-based Nasdaq index after the results were released late on