The concern for investors should be centered around the Marketplace business and if the recent changes are having the desired effect. It is great for PayPal and Skype to be growing very fast, because their growth helps the overall business and limits the financial damage coming from the Marketplace business, but if eBay can't stop the bleeding in the US business, management is going to have a tough time.
Some things to look for during the conference call:
- What are the active user numbers? Are they growing again?
- Is GMV growth still in single digits?
- Is International GMV taking more share of total GMV?
- Did the Buy.com deal grow GMV in their categories or just take it from other sellers at a lower take-rate?
- How much of PayPal's revenue is coming from outside of eBay.
- What happens if Amazon actually launches a true competitor to PayPal?
It will certainly be an interesting conference call, as it will be the first where John Donahoe was fully in charge. I have no doubt they will meet their numbers; CFO Bob Swan is that good. Do they have the right strategies and right people in place to turn around the flagship eBay business?
During the Q4 2006 earnings call, Meg said;
"Responding to a changing competitive landscape is part of this company's DNA, and I believe we have a great set of assets, the right strategies and the right people in place to maintain our sizable lead in all of our business units. Even with these challenges, we still delivered strong results for the full year and are extremely well positioned for continued success into 2007." (bold is mine)
Just my 12%