EBAY’S PAYPAL business has become one of the largest online payment systems, but its now heading offline, chief executive John Donahoe said in the wake of the company’s quarterly results.
“We intend to help retailers grow their businesses offline in the same way we helped merchants grow online,” said Mr Donahoe.
Ebay reported second-quarter results late Wednesday that were dented by acquisition costs, and the e-commerce company forecast third-quarter profit just below analyst forecasts, sending shares 1 per cent lower to $32.58.
PayPal reported $1.073 billion in second-quarter net revenue, up 31 per cent from a year earlier. It is the first time PayPal has generated more than $1 billion in quarterly revenue.
Ebay and Paypal have a combined workforce of 1,600 staff in Dublin. PayPal’s growth has been driven by online payments.
However, Mr Donahoe said that the boom in smartphone usage is blurring the lines between online and offline commerce.
“We’ve had merchants reach out to us quite aggressively, and saying they want us to bring PayPal into the point of sale,” he added. “We see it as an incremental opportunity, and a fairly significant incremental opportunity that will play out over the next three to five years.”
Analyst Ken Sena of Evercore Partners said investors want Ebay to pursue the offline payments opportunity more aggressively.
One way may be to partner with daily deal companies including Groupon and LivingSocial, Sena said. Mr Donahoe said eBay would consider such partnerships.
Ebay has stressed it is ambivalent about what mobile payment standards emerge as the dominant technologies, arguing PayPal will work with all platforms.
Ebay said second-quarter net income was $283.4 million, or 22 cents per share – down from $412 million, or 31 cents a share, a year earlier. The decline in earnings was mainly driven by costs from eBay’s acquisition of GSI Commerce earlier this year.
Excluding acquisition costs, stock-based compensation expenses and other items, profit was $630.9 million, or 48 cents per share, versus $530 million, or 40 cents per share, a year earlier. – (Reuters)
