EBay stock pops 5% on strong sales

chart_ws_stock_ebayinc.top.pngClick the chart for more on eBay shares. By Julianne Pepitone, staff reporter

NEW YORK (CNNMoney) -- John Donahoe took the helm at eBay at the start of 2008, just as the company unveiled a slew of changes to the decade-old online marketplace. A major revamp of eBay's fee structure and feedback policy was meant to shore up market share, but veteran sellers were furious and threatened revolt.

The company has clawed its way back up since those torrid times. On Wednesday, the San Jose, Calif., e-commerce giant reported quarterly results that beat Wall Street expectations and raised its outlook for the year.

PayPal and mobile especially helped the company during last quarter's holiday season.

EBay said its fourth-quarter revenue rose 5% over the prior year, to $2.5 billion. Net income rose to 42 cents a share, or $559.2 million. EBay (EBAY, Fortune 500) shares rose 5% in after-hours trading.

PayPal and mobile payments shine: Online payment service PayPal ended the fourth quarter with 94.4 million active registered accounts and is adding about 1 million active accounts per month.

PayPal's "net total payment volume" was $26.9 billion last quarter. The biggest growth came in mobile: For the full year, the volume of PayPal mobile payments increased to a whopping five times 2009's total.

Those figures weren't broken out, but eBay said its "portfolio of mobile applications" were popular with holiday shoppers. The company's overall mobile gross merchandise volume -- the total of stuff it sold to those shopping on their smartphones and other gadgets -- was almost $2 billion for the full year.

Europe was another bright spot, Donahoe noted in a conference call with analysts. But he's not as pleased with domestic figures.

"We're on a good trajectory, but I'm not totally satisfied with where we are in the U.S.," Donahoe said on the call.

Who's selling and for how much: The number of active eBay users rose 5% over the year to 94.5 million.

Another widely watched metric is eBay's gross merchandise volume (GMV), which is the total value of items auctioned. Excluding vehicles, GMV for the fourth quarter was $15 billion.

EBay has come a long way from 2008. The company's stock took a dive in the first months of Donahoe's tenure, as the site's core sellers spearheaded protests, including a week-long boycott -- and many jumped ship, moving their online storefronts to other sites like Amazon (AMZN, Fortune 500).

The fee changes reduced some upfront costs but raised the commission eBay takes on completed sales. That hike was painful for small businesses that depend on meager profit margins.

Even more incendiary, though, was the site's decision to block sellers from leaving negative feedback about buyers. EBay's feedback system had been a two-way street, which helped the site differentiate itself from early competitors. Sellers were not happy to be silenced.

That lingering bitterness turned eBay from a site with a strong user community into a more generic sales platform.

But the changes did eventually pay off on the bottom line. For 2010, eBay's full-year revenue hit a record $9.2 billion -- up 21% from the $7.7 billion it had in 2007.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,307.80 41.81 0.24%
Nasdaq 4,584.20 -9.23 -0.20%
S&P 500 2,013.14 1.78 0.09%
Treasuries 2.59 -0.04 -1.60%
Data as of 3:54pm ET
Company Price Change % Change
Yahoo! Inc 41.05 -1.04 -2.46%
Bank of America Corp... 16.98 -0.05 -0.32%
Oracle Corp 39.90 -1.65 -3.98%
Microsoft Corp 47.18 0.50 1.07%
Apple Inc 101.74 -0.05 -0.05%
Data as of 3:39pm ET


P&G, a major NFL sponsor, will still contribute $100,000 to fight breast cancer but won't be part of the league's events next month. More

Scotland's clear rejection of independence has eased fears that it could suffer the kind of decline seen in Quebec after it failed to break away from Canada. More

It's really good to be Larry Ellison. The Oracle founder is stepping down as CEO, so maybe he'll have more time to enjoy his glamorous life. More

As Occupy Wall Street goes on its debt-abolishing tear, thousands of people across the country are begging them to forgive their loans. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.