FRAMINGHAM (04/26/2000) - So far it's been a good millennium for San Jose-based online auctioneer eBay Inc. The company said its first-quarter revenue, $85.8 million, was up 100 percent from last year's first-quarter revenue of $42.8 million.
Consolidated net income for the quarter was $6.3 million, or 5 cents per share on a diluted basis. At $1.15 billion, the company exceeded $1 billion in gross merchandise sales for the first time. And company directors approved two-for-one stock split to take effect May 24 for all shares of record as of May 9.
Registered users for eBay's Web site increased 230 percent from 3.8 million to 12.6 million over the past year. EBay reported 2.6 million new users registered in the first quarter of this year, setting a company record.
The site hosted 53.6 million auctions during the quarter, an increase of 133 percent from 22.9 million in the first quarter of 1999. Online auction activity was the primary contributor to the company's increased revenue, while off-line auction subsidiaries saw decreased revenues over the prior quarter.
The company's first-quarter business activity included the launch of eBay Japan, an alliance with Wells Fargo & Co. to let individual customers accept credit-card payments for auctioned items and a joint venture with Autotrader.com to create an online used car auction marketplace.
Chuck Hill, director of research for First Call/Thomson Financial, said that analysts expected eBay would earn 3 cents per share, not 6 cents. "EBay is one of the few that has achieved a unique position in the online market," Hill said, allowing it to turn a profit.
"We're getting past the days where it was fine to be losing money every quarter. I think the market has lost patience with that," he noted.
David Cooperstein, director of online research for Forrester Research Inc., said it was still possible for eBay to be successful despite several months of technical problems. "Technology is a resolvable problem [when you] have a business that's based on transaction fees, not marketing, which is the case with other online companies," Cooperstein said.
It helps the bottom line that eBay is a leader in its market. "There are some names that are going to dominate in online business. Amazon, eBay and Yahoo are some of those," he said.