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Another strong quarter for eBay, which saw revenues grow by 30 percent, to $1.89 billion from $1.45 billion. Net income, excluding the impact of its Skype writedown, grew by 53 percent to $564 million or $0.41 per share. Factoring in the Skype charge, it lost $936 million or $0.69 per share. Most of the company’s gains came at its core Marketplaces business, which had a growth rate of 26 percent. PayPal also performed well, with revenue hitting $470 million on growth of 35 percent. And just to give you an idea of how high the bar was set for Skype, this unit grew by 96 percent to $98 million in revenue, but that obviously wasn’t good enough. Registered users for the service hit 246 million, up 81 percent from last year. Release | Webcast | Transcript (via SeekingAlpha)
Conference Call: So how does a unit that grew revenue by 96 percent end up missing expectations? According to CEO Meg Whitman, eBay (NSDQ: EBAY) has been too focused on monetizing Skype, extracting as much revenue as it could, while underinvesting in the product itself. That’s the claim, anyway. Looking ahead, the company still sees a lot of potential there and it plans to invest more in the unit going forward, while deemphasizing financial returns.