21 July 2010
As expected eBay INC posted reasonably good numbers for the second quarter of 2010. But for small businesses on eBay there is the nagging side question, 'How did eBay.com do?'.
Net Revenue growth is up an anemic 1% from the previous quarter.
Revenue generated principally through fees paid by users of eBay.com. That is the more a seller lists, the more a seller sells, the more Marketplace Revenue eBay.com generates. Of course when sellers slow down, so does eBay.com.
If you were selling on eBay.com, were you using PayPal?
The number of PayPal payments made and the amount of those PayPal payments, showed little change from the prior quarter. Essentially sellers using PayPal saw little or no sales growth.
What about those claims that there is less merchandise on eBay.com. That is, have products moved off eBay.com?
Car sellers have 8% More inventory on eBay.com than the previous quarter. Sellers of everything else have 6% Less inventory on eBay.com than the prior quarter.
Wonder where it went?
Auction seller inventory now represents 41% of eBay.com's GMV (Gross Merchandise Volume). That's a decrease of 2% from the first quarter.
We'll leave readers with this fun fact:
"eBay also uses free cash flow. Free cash flow represents operating cash flows less new purchases of property and equipment. eBay considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of property, buildings, and equipment, which can then be used to, among other things, invest in eBay's business, make strategic acquisitions, and repurchase stock."
As a business, you wouldn't be worried about declining net cash and free cash flow. Would you?
"Our EBAY fundamentals call for Q2 is mixed - For Q2, we expect revenue growth deceleration"
Mark Mahaney, Citigroup