EBay considers possible moves for StubHub and its classifieds divisions
Ebay, the global online marketplace, has released its third-quarter financial results, providing an update on various aspects of its business.
The interim CEO of Ebay, Scott Schenkel, who joined last month, presented the results. One of the most significant developments is the 5% rise in StubHub revenue, which reached $306 million in the third quarter. However, the company is currently reviewing its options regarding the StubHub ticketing business for long-term strategies.
Ebay's global active buyers base expanded by 4%, reaching 183 million across platforms. The company's marketplace revenue, on the other hand, saw a 1% decrease to $2.1 billion in the third quarter. The classifieds business, meanwhile, recorded a 4% increase in revenue, totalling $265 million.
Promoted Listings, a key advertising initiative, generated $103 million of revenue, marking an over 120% year-over-year increase. Ebay is looking to boost its revenue further by leveraging advertising dollars, similar to the strategies employed by Amazon and social media sites such as Facebook and Instagram.
The third quarter's revenue remained flat year over year at $2.6 billion. This figure was slightly ahead of analysts' estimates for the quarter. However, the gross merchandise volume (GMV) fell 4% to $21.7 billion, with the decline being 2% below the Wells Fargo forecast. The primary reasons for this decrease include competitive pressure in Korea and the roll-out of U.S. Internet sales tax.
The GAAP net income from continuing operations for Ebay fell 57% or $410 million in the third quarter. The GAAP operating margin also saw a decrease, falling to 20.1% in the third quarter. These figures might disappoint expectations set by activist investor Elliot Management regarding the company's operating margin.
The company is not providing details about the prospects for its classifieds business at this time. Ebay's new CEO, Jamie Iannone, who took over after Devin Wenig, will likely provide more insights in the future.
In a notable development, more than a million Ebay sellers promoted over 300 million listings during the quarter, demonstrating the continued engagement of the seller community on the platform.
Looking ahead, an update on the StubHub ticketing business will be provided next quarter, offering more insights into Ebay's strategic direction for this segment.
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