eBay Inc. has released its second quarter fiscal results, posting gains largely because of PayPal’s accelerating growth.
eBay generated $2.215 in revenue during Q2, an increase of 6% from the $2.098 billion it brought in during the same time period last year. eBay was quick to point out that its revenue growth amounts to 15%, if you exclude the impact of 2009’s Skype sale on its books. eBay earned $412 million in net income, an increase of 26% from the previous year.
However, the breakdown of its business units reveals that eBay is relying more and more on PayPal for its growth. While the eBay marketplace still generates the majority of the company’s revenue — $1.398 billion — its PayPal division brought in revenue of $817 million. More importantly, PayPal’s revenues grew by 22%, while eBay’s marketplaces only increased by 11%. Most of that growth is international; eBay’s auction business only grew by 2% in the U.S.
PayPal has been a bright spot in eBay’s portfolio. While the site is still one of the most visited on the web, it has been steadily losing ground to the likes of Amazon and others. The auction model, wildly popular in the late 1990s and early 2000s, has lost some of its luster. PayPal, on the other hand, added a million new accounts per month in Q2. It wouldn’t shock us if PayPal became eBay’s biggest business unit in the next few years.
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