As PayPal split looms, eBay plans to think small

The China Post - - WORLD BUSINESS - BY MAE AN­DER­SON

EBay plans to grow by think­ing small as it pre­pares for life apart from PayPal.

The com­pany says it is fo­cus­ing on get­ting more peo­ple, as well as small- to mid-size busi­nesses, to buy and sell items on its popular on­line mar­ket­place.

The ef­fort comes as it at­tempts to ad­dress in­vestor con­cerns about how it will fare later this year af­ter it spins off its PayPal pay­ments di­vi­sion, which has long been EBay’s fastest-grow­ing seg­ment.

CEO John Don­a­hoe said Wed­nes­day the com­pany is mov­ing to­ward the spinoff with “clar­ity and speed.”

EBay’s first- quar­ter earn­ings may have mit­i­gated in­vestors’ con­cern some­what. The re­sults beat ex­pec­ta­tions and rev­enue, ex­clud­ing the im­pact of the stronger dollar, grew in both seg­ments. A stronger dollar cuts into rev­enue gen­er­ated over­seas when it’s trans­lated back into dol­lars.

The e-com­merce com­pany

is seek­ing to rein­vig­o­rate its mar­ket­place busi­ness, which in­cludes the e-com­merce arm of eBay. It stum­bled last year when it had to deal with a change in Google’s al­go­rithms that made eBay prod­ucts come up in search re­sults less of­ten. It was also hit by a data breach that led to all its users be­ing re­quired to change their pass­word.

For the quar­ter end­ing March 31, mar­ket­places rev­enue fell 4 per­cent to US$2.07 bil­lion, hurt by the stronger dollar. But the com­pany said it sees signs of sta­bi­liza­tion in ac­tive buy­ers and gross mer­chan­dise vol­ume, or the to­tal amount of goods sold, ex­clud­ing the im­pact of the stronger dollar.

Wenig said eBay will fo­cus on grow­ing its 25 mil­lion sell­ers and 157 mil­lion ac­tive buy­ers by fo­cus­ing on small- and medium-size mer­chants that make of 70 per­cent of the global re­tail mar­ket. He said eBay is a “part­ner, not a com­peti­tor,” to those busi­nesses, per­haps a nod to on­line re­tailer Ama­zon, which is eBay’s big­gest com­peti­tor in the third-party seller area.

In­di­vid­ual con­sumers are an­other fo­cus.

Ear­lier this month EBay and PayPal agreed in an SEC fil­ing that PayPal will still process at least 80 per­cent of trans­ac­tions on eBay af­ter the splitoff, even though both can work with new part­ners. The agree­ment lasts five years with a one-year tran­si­tion pe­riod. The com­pa­nies will con­tinue to share data and will not build com­pet­ing prod­ucts dur­ing the agree­ment pe­riod.

Shares of eBay Inc., which is based in San Jose, Cal­i­for­nia, rose US$3.01, or 5.3 per­cent, to US$59.76 in af­ter­mar­ket trad­ing. The stock had been up about 1 per­cent since the be­gin­ning of the year.

AP

This July 16, 2013 file photo shows an eBay sign at eBay head­quar­ters in San Jose, Cal­i­for­nia.

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