Tide rises for eBay earnings
The online auctioneer raises its outlook for the year, announces income and revenue that were nearly double that of the year-ago quarter, and unveils plans for a 2-for-1 stock split.
The online auction house said it earned $109.7 million, or 33 cents per diluted share, in the second quarter, compared with $54.3 million, or 19 cents per diluted share, for the same quarter last year. The company reported second-quarter net revenue of $509.3 million, a 91 percent increase over $266.3 million in the year-ago quarter.
The company's results topped analysts' expectations by 2 cents, according to a survey of analysts by First Call.
eBay also said its board had approved a 2-for-1 stock split that would go into effect Aug. 28 for shareholders of record as of Aug. 4. In addition, the company raised its outlook for the year, saying its revenue could be as high as $2.08 billion in 2003, a $25 million increase above what it had previously predicted, saying it saw strength in both its U.S. and international units.
"Our thriving community of buyers and sellers continues to spread the word that eBay is a great place to trade, build a business, make friends, and have fun," eBay CEO Meg Whitman said in a statement.
eBay is looking to new revenue opportunities to boost earnings in coming quarters
Taking a page from commercial search companies such as Google and Overture Services, eBay introduced a keyword advertising program for members last month at its annual member conference in Orlando, Fla. As with so-called pay-for-performance search, eBay store owners can bid for rights to certain keywords, such as "baseball" or "computers," related to their products. The highest bidder would then display a simple text promotion at the top of those keyword search results. Bids start at 10 cents.
"The banner ad business was not met with the same level of success" as paid links have recently, eBay spokesman Kevin Pursglove said. "This is another way to look at advertising on our site, with that strategic goal of driving more buyers to eBay sellers and increasing transactions."
CNET News.com's Stefanie Olsen contributed to this report.