Can eBay Survive Without PayPal?

Mar. 02, 2015 6:13 PM ETeBay Inc. (EBAY)AMZN, BABA, SPLS, WMT21 Comments
Daniel Jennings profile picture
Daniel Jennings


  • eBay's revenues indicate that it can survive without PayPal.
  • With its current business model, the company will not experience significant revenue growth without PayPal.
  • Revenue figures indicate that eBay's marketplace business has lost its momentum.
  • Fulfillment by Amazon is a better online retail solution for third-party sellers than eBay's new Valet service.
  • eBay is facing intense competition in the lucrative third-party sales sector from Amazon, Wal-Mart, Staples and other online retailers.

The simple question of whether eBay Inc. (NASDAQ:EBAY) can survive without PayPal has been on my mind a lot lately, because I'm both an eBay investor and an eBay retailer. The question also is a very reasonable one if you take a look at eBay and PayPal revenues.

eBay reported TTM revenue of $17.9 billion on December 31, 2014. That revenue has been growing steadily for some time - it was $16.05 billion in December 2013. The problem is that PayPal's revenue makes up around 44% of eBay's revenue. My calculation is that PayPal's revenue for 2014 was around $7.786 billion. Subtract PayPal from eBay, and the auction site's TTM revenue would have been $10.114 billion in 2014.

Can eBay Grow Without PayPal?

Judging by revenue alone, eBay could survive without PayPal, but would it actually grow without PayPal? PayPal reported that its TTM revenue grew at a rate of 18% between fourth-quarter 2013 and fourth-quarter 2014. During the same period, eBay's TTM revenue grew at a rate of 8.63%. The question we need to ask is, how much of that growth was driven by eBay's marketplace?

eBay reported that its marketplace revenue grew by 1% between fourth-quarter 2013 and fourth-quarter 2014 in this PDF. Although, it did report that marketplace revenues grew by 8% between the third and fourth quarter of 2014. The problem with that growth is that a lot of it was probably driven by holiday shopping.

It looks as if eBay's core marketplace or auction business has lost its momentum. The company's growth is being driven by PayPal, where business is booming. PayPal reported that the total volume of transactions it processed in fourth-quarter 2014 was $64.3 billion, an increase of 24% over the same period in 2013. PayPal's Merchant Services, which make up 76% of its business, grew by 33% in the same time

This article was written by

Daniel Jennings profile picture
Daniel G. Jennings is a professional freelance writer, longtime blogger, and recovering journalist with nearly 20 years of writing experience. He has written hundreds of articles and blog posts for clients all over the world, many articles on stocks and financial topics for Motley Fool and Seeking Alpha, and other forms of copy for many different websites. Off the web, Jennings has an MBA and a BA in history; he has also worked for newspapers in four states and in the accounting department of an S&P 500 corporation. He is currently the owner and operator of the Car Insurance Samurai, Market Madhouse, and Make Cash from Books blogs.

Disclosure: The author is long EBAY. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The author conducts online retail sales through both eBay and

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