Profits still sliding at eBay

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By Stuart Turton

Posted on 23 Apr 2009 at 11:50

EBay's profits fell 22% in the first quarter of this year, as falling consumer demand hurt the auction site's core business.

For the quarter ending 31 March, the site recorded revenues of $2.02 billion, down 8% from the same period in 2008.

Profits fell 22%, dropping to $357 million from $459 million during the first quarter of 2008.

EBay blamed a stronger US dollar for impacting its auction business, but stressed that both PayPal and Skype had performed well.

Though eBay offered no new details on the recently announced Skype spin off, the company acknowledged that revenues had risen by 21% to $153.2 million, with the service attracting 37.9 million new users.

PayPal also experienced a strong quarter, with revenues rising 11% to $640.3 million from the same quarter last year, as it handled $15.86 billion of payments.

"We delivered solid Q1 results, exceeding expectations in a tough economy," says chief executive John Donahoe. "Overall, we're a strong company operating in a challenging economic environment."

Speaking on the decision to divest the company of Skype and StumbleUpon, Donahoe claims the company has "moved aggressively to strengthen" its core business, but that the environment "remains challenging."

EBay exposed: fat fees, hidden costs and sellers in revolt - read the feature in this month's PC Pro, on sale now