eBay earnings preview – Q4 2010

January 19, 2011

ChannelAdvisor ChannelAdvisor By ChannelAdvisor

eBay is set to announce Q4 this evening and we’ll be watching a couple of things closely.


eBay Marketplace Health Metrics

From a seller’s perspective, the health of the eBay marketplace is the main attraction of tonight’s announcement.  The biggest datapoint we follow is GMV growth.  As reported earlier, we saw eBay Same Store Sales at 3.8%.  While we use SSS for customer benchmarking, it’s not a great proxy for what a marketplace like eBay did ‘all in’ – they could have had a ton of new sellers in the year not covered in SSS or a ton of seller defections.  Our all-in eBay number is a good bit larger than that reflecting a lot of larger brands coming onto the site and we know a lot of smaller sellers are leaving.

To put it in context, Wall St is looking at US GMV growth of around 2% and non-domestic around 10% – anything above those will be viewed very positively.

In addition to GMV growth, we also track:

  • Sold item growth – This was 13% in Q3, any acceleration or deceleration would be interesting.
  • Active user growth – This grew about 4% in Q3, again look for any increase/decrease.
  • Category data – eBay releases some pretty interesting category data a couple of days after the financials hit the streets. We’ll dissect these and report on any interesting trends.

Mobile Update

eBay already stated that 2010 saw ~$2b in mobile GMV.  With the RedLaser and Milo acquisitions and PayPal efforts it will be interesting to see what’s going on here and if they remain bullish on the sector.

PayPal items of interest

We always keep an eye on the Paypal growth rates both on and off eBay as well as TPV trends.  Also there’s a lot of talk about Near Field Payments coming to Android and iPhone that could be an opportunity and threat to Paypal.

Finally, there’s some Durbin banking legislation that I’m hearing a lot about that could reduce PayPal’s ACH costs and be a positive to the bottom line. It will be interesting to learn more about that.

2011 Guidance

Q4 has been in our rear-view windows for a while now, it will be probably most important to see eBay’s posture for the PayPal and Marketplace businesses heading into 2011.

Stay tuned, later tonight we’ll pull out all of these highlights and anything else of interest after we listen to the call.

SeekingAlpha disclosure – I am long Amazon and Google. eBay is an investor in ChannelAdvisor where I am CEO.