This is part 2, part 1 is here, I recommend reading these in order.
Reminder – if any of the acronyms here are confusing, check the backgrounder here.
ST started with a very broad overview of PayPal that was really very very basic so I don’t have anything to add there. There was a video of a merchant talking about how great PP is.
For example, here’s a slide of Helga who wants to buy on the internet, but look at all the bad guys that are after her!
The highlight of this segment is when ST thew a little SMACK: “Amazon, Google and banks do not have the PP list of competitive advantages.”
PayPal Background + Opportunity
A couple of new slides were interesting
Here they are showing TPV doubling by 2011 to $100-120b. Not sure how this jives with Analyst comments, but it implies a 33% CAGR.
Slide above – PP plan on growing penetration on eBay from 58% today to 73-78% in 2011. By nuking paper on eBay, they have nearly guaranteed that PP will be used for all but autos, so this seems doable faster IMO. Need to do math to see if this counters the decline of eBay problem.
The above shows the PP penetration in markets. Interesting that DE is so low – ACH is dominant there and they’ve had a hard time justifying $ they charge with buyers and merchants. That could make Asia very hard / near impossible for them. Notice there is no Asia here.
Slide above – Shows on/off eBay TPV. Notice how there were basically zero new accounts between 1H07 and 2H08 and how small the TPV bump was as well. As they try to get to that $120b, eBay will be a drag and they will have to really amp up the off-eBay IMO.
Slide above shows that they expect to go from 5% merchant services coverage (merchant adoption and consumer pref) to 8-9% by 2011.
Slide above shows segments they think about (this has been constant for last 5yrs which is helpful) Interesting tidbit, that the growth rate seems to be slowing in sole/smb and ramping in large.
They want to go from 9% TPV to 13 by 2011 in the US and from 2, to 5-6% in International as illustrated above.
That would generate $4-5B in revenue by 2011 according to ST.
He went through some basics on BML and how it works. Says it will be integrated ‘later in the year’ (come on guys, why so long?)
This one was interesting – shows the priority stack for BML – notice that ‘Grow eBay GMV” is at the top – hooray!
He spent some time talking about this nebulous concept about potential ways PP can be used in social networks, non-profits, etc. Talked about opening the platform later this year. Not sure this makes sense to me as they have tons of developer programs already (for example, we’ve been working with PP platform for close to 6yrs now). So not clear what if anything is new here?
SeekingAlpha Disclosure – long Amazon and google