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eBay Changes India Strategy

Aug. 07, 2018 8:17 PM ETeBay Inc. (EBAY)12 Comments
Sramana Mitra profile picture
Sramana Mitra


  • The Walmart and Flipkart deal made eBay change its India strategy.
  • The sale of Flipkart will imply that eBay would receive $1.1 billion from Walmart for eBay's 5.4% stake in Flipkart.
  • eBay plans to use those funds to relaunch eBay India.

eBay (NASDAQ:EBAY) recently reported a lackluster second quarter that beat analyst estimates for earnings but missed the revenue estimates. Its outlook also was disappointing.

eBay's Financials

eBay's Q2 revenues grew just 9% over the year to $2.6 billion, below the Street's expectations of $2.66 billion and the company's revenue guidance range of $2.64-$2.68 billion. Net income was $638 million or $0.64 per share. Non-GAAP net income was up 17% to $533 million, or $0.53 per diluted share, above analyst estimates of $0.51.

By segment, revenue from its Marketplace grew 9% to $1.8 billion. StubHub revenues grew 5% to $240 million. Marketing services and other revenue increased 10% to $563 million including Marketplace revenue of $298 million (up 6%) and Classifieds revenue of $259 million (up 18%).

Among operating metrics, eBay's active buyers rose 4% to 175 million at the end of the quarter. It reported that the gross merchandise value transacted on the marketplace platform was up 11% to $22.6 billion. GMV for Stubhub improved 5% to $1.1 billion.

During the quarter, eBay repurchased $1 billion of its common stock. The company's total repurchase authorization remaining as of June 30, 2018, was $5.7 billion. The company's cash and cash equivalents and non-equity investments portfolio totaled $8.6 billion at the end of the quarter.

For the third quarter, eBay forecast revenues of $2.64-$2.69 billion or a growth of 5%-7%. It expects GAAP EPS in the range of $0.37-$0.41 and non-GAAP EPS in the range of $0.54-$0.56. The market was looking for revenues of $2.73 billion and an EPS of $0.56.

eBay's New Offerings

During the quarter, eBay launched a new feature called Interests that tailors consumers' shopping experience based on their passions, hobbies, and style. Shoppers select what they're interested in, and the new feature customizes their homepage with themes and items chosen just for them.

This article was written by

Sramana Mitra profile picture
Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual accelerator that aims to help one million entrepreneurs globally to reach $1 million in revenue and beyond. She is a Silicon Valley entrepreneur and strategy consultant, she writes the blog Sramana Mitra On Strategy, and is author of the Entrepreneur Journeys book series and Vision India 2020. From 2008 to 2010, Mitra was a columnist for Forbes. As an entrepreneur CEO, she ran three companies: DAIS, Intarka, and Uuma. Sramana has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology. Full bio can be found at http://www.sramanamitra.com/bio/

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Comments (12)

Read you loud and clear ebay insider. It simply is this for me: Of all the businesses in the world today...and I mean ALL the world's entities...

...EBAY is one to me that should be excelling. But it is not excelling whatsoever. I just find this interesting, that a big auction house flails, stumbles, and falls all over itself.

I did some ebay selling of my bikes (avid cyclist) until I tried my best to describe a bike frame I was selling and the buyer accused me of photo shopping and lying about the frame. I had done my best, and thought he'd be delighted considering the price he attained. Uhh, for me it was quite the letdown. I was fully aware with this buyers comments (which I got deleted) I was toast as to selling anything again. Not a big deal for me, except that I enjoyed the process. I am older and not poor, the financial outcome of it all was meaningless to me. Today I just give stuff away, hundreds of dollars- sometimes many thousands- but I avoid selling on EBAY at all costs. Hateful atmosphere to me.
Disagree with all the posters above. EBAY is a business and a good one, and I don't give a flip if they own tangible assets or not. What I don't understand is why it is so expensive and difficult to sell things on EBAY. Got to be some improvements to this system that make this business work smoother/simpler for sellers.

They are (attempting) to make these changes, but unfortunately are too late to the game. And their so-called "solutions" center about constantly raising fees while taking away the ability of a seller to profit (requiring Free Returns to now receive a Top-Rated Seller discount, for instance).

Just like a professional sports team, it's not how much money to spend, but how it is spent. And obviously this company has not invested properly in their business.

Don't know by your post if you actually are someone who sells on eBay, or strictly a stock investor. Have you noticed that a few of their corporate brass has recently cashed in some of their shares? This cannot show confidence for the future when analysts peg the price target at $42-$44 and execs are selling many shares at
eBay lives like its 1998. Nuff said.
Analysis fo stock. If you don't care about model business canvas but want insight to ebay, start this video at the 7:10 mark.

To all you giddy, potential ebay stockholders...
ebay owns NOTHING...sells NOTHING...ship/delivers NOTHING.
It has TWO assets...cash and BAD ideas.
It rents out pixels on the internet. PERIOD.

Any future "worth"/growth is built solely on the mouth of the CEO.
The man has the business acumen of a can of corn.
Author Statement:

".......eBay also introduced Best Price Guarantee that offers US shoppers 110% of the price difference if they find an item for less on a competitor's website......."

This only applies to a few certain hand picked items (which eBay is likely financially subsidizing from select suppliers), not site-wide.

To finance these promotions, sellers have to pay more in ever-increasing fees. Read the eBay Community boards about this latest Seller Update- most comments are from book and media vendors who will now move their inventory to Amazon, since the commissions will be raised soon from 9.15% to 12% (a 32% jump).

And the rich get richer. This will be a boon for Mr. Bezos, and eBay will continue to bleed GMV and market share.
Well - would you buy a stock when it really "does nothing"?

32.85 - 46.99.

32.85 was the 52 week low - today its at 33.85 - so in almost a yr - its gone up %1.

WOW, "I guess all the garbage the know nothing in charge is doing is working" (sarcasm off).

eBay Fall Seller Update - eBay raised fees - wow, how unique and forward looking.

eBays catalog features DONT WORK, eBays return policies dont work, the CEO doesnt work (hes busy hanging with his body guards, jet setting to the Hamptons all the time).... so the question is - WHAT DOES WORK?

"Sure, go ahead and buy eBay stock. Dont buy Google, or Apple, or Walmart or Amazon - those stocks are for morons - THOSE stocks/companies never produce ANYTHING" LMAO (sarcasm off).
Oh yeah...ebay is a good buy in the sense that overripe bananas are a good buy.
Great price, but...
The stock is NOT a Buy.
eBay treats its Best Customers like Garbage.
Garbage In - Garbage Out.
Devin has a Law Degree - Not a Business Degree. He is so busy throwing crap at the wall to see what may stick that he has no time to sit down and listen to his customers.
Unless eBay is bought by another firm - it is Garbage.
so is the stock a buy now?
ebay needs to change something else...it's CEO
Like yesterday.
The ebay discussion boards and ecommercebytes should be required reading for analysts.
Reading ebay's current charts is a waste. In no way do they predict it's future.
One exception...the stock price. It may never finish above 34 again.
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