PayPal Saves eBay's Quarter

Wednesday, Oct 21, 2009  |  Updated 4:00 PM PDT
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PayPal Saves eBay's Quarter

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Increased success for PayPal could be a huge boost for eBay.

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 EBay Inc. said Tuesday that even as third-quarter net income dipped 29 percent, its revenue rose largely because more people and merchants are using PayPal to pay for things online.
     
The San Jose-based company said the number of active PayPal accounts rose 19 percent to 78 million compared with a year earlier. That contributed to a 15 percent revenue jump to $688.1 million in its payments business -- which includes PayPal and short-term credit service Bill Me Later.

But eBay's core marketplaces business, which includes the main eBay site and other sites like Shopping.com, saw revenue dip 1 percent to $1.4 billion. The company attributed this decline partly to the negative impact of foreign exchange differences.

The online marketplace operator's third-quarter net income fell as operating expenses climbed. EBay earned $350 million, or 27 cents per share, compared with net income of $492 million, or 38 cents per share, in the year-ago quarter.

Revenue rose 6 percent to $2.24 billion.

Shares in eBay, which also forecast third-quarter results in line with analyst estimates, fell $1.31, or 5.2 percent, in after-hours trading. The shares had finished regular trading down 3 cents at $25.03.
 

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