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EBAY Q3 2008 Earnings: MarketPlace Rev$ Flat (note to mgmt: spin out PayPal, or expect to get taken over)
thx to Keith Teare for uploading eBay Q3 2008 Earnings ppt to SlideShare:
- Marketplace revenue flat and/or decaying
- PayPal revenue flat this qtr *but* Y/Y growth, still plenty of potential
- Skype shows surprising growth; maybe not bad a deal as ppl think
- aside from acquisitions, still severe lack of imagination at the top
- if they don't spin out PayPal+BillMeLater, someone else should LBO this sucker before mgmt drives it into a ditch.
sigh. so much potential being wasted. but hey, they do awesome powerpoints.
Dave,
The private equity guys can't borrow money to do an LBO cause the credit crisis has dried up all sources of credit.
I would say that your suggestion to spin out PayPal as an independent company would be awesome for the market. PayPal is the best business unit in eBay. The market would actually be eager to buy a quality issue.
Given enough time - PayPal should be bigger than eBay Marketplace.
Posted by: Allan | Wednesday, October 15, 2008 at 07:25 PM
ok, so i get that there's no credit *at the moment*, but you think that's gonna be the case forever?
gotta believe SOMETIME in the next few quarters there will be some folks itching to get back into that business.
for stuff that's not proven i can see there being a long drought, but PayPal has a long & strong track record...
Posted by: dave mcclure | Wednesday, October 15, 2008 at 07:39 PM
DMC, we've spoken on this before in your PayPal days. Of course they should spin it off- they won't though. It will eclipse the eBay Marketplace revenues within 5 years imho. So they spin it off, get a ton of cash to play with, then what? They will still make the same mistakes as they are now with eBay. Frankly, I'm surprised they are letting PayPal run as free as it has been, but with that kind of growth, they are smart not to touch it.
Posted by: sprfrkr | Thursday, October 16, 2008 at 07:39 AM
Another great one Dave. Very relevant to me.
Posted by: RAGZ | Friday, October 17, 2008 at 02:57 PM
Not sure why Ebay needs to drawdown $1 billion in revolving credit when they have $3.64 billion in cash on hand and no debt. Supposedly because of their $1.3 billion in recent acquisitions. It sounds fishy to me.
Only way it makes sense is if they have counterparty transactions that may be driving liquidity concerns. Stock's at less than 10x forward earnings, though, real cheap.
Posted by: Ted Murphy | Saturday, October 18, 2008 at 02:48 PM
eBay needs to move on lowering fees & turning the business into profit by volume. I also don't entirely understand the reasoning behind killing auctions so much (fixed price & auctions could easily co-exist). Why not let the buyer decide what they want to look at when they enter the site (fixed v. auctions)?
Posted by: Damon Billian | Wednesday, October 22, 2008 at 02:14 AM