Skype and PayPal Keep Revenue Up in eBay's Q3 at 9:41 AM

EBay has just announced its third quarter financial results which, despite being better than expected, still managed to drive down share prices after the company also predicted a slightly worse performance in the coming quarter. eBay managed to bring in $2.23 billion in revenue in Q3, a six percent bump over last year, but net income was down 29 percent year over year to just $350 million. Analysts expected revenue to be at $2.14 billion. Like in the previous quarter, Skype and PayPal stood out while eBay's main
auctions business was down 1 percent.

“Our third quarter results were strong with PayPal gaining momentum and market share worldwide and our core eBay business showing positive trends,” eBay Inc. President and CEO John Donahoe, said. “We’re delivering on our commitments, executing on our plans and operating smarter and faster.” PayPal was the company's best performer with a 15 percent rise in revenue up to $688 million. The payment unit also gained a significant increase in registered accounts, rising 19 percent since last year to 78 million.

Skype was also a highlight with a strong 29 percent growth in revenue year over year and reaching $185 million in Q3. At the same time the communications service also gained 40 million new registered users in the period to reach 520 million. Skype usage also grew significantly with Skype-to-Skype minutes growing 74 percent to 27.7 billion while external calls, SkypeOut minutes, grew 44 percent to 3.1 billion.

eBay has recently sold a majority stake in Skype to private investors and hopes that the transaction will close in the fourth quarter. The 65 percent stake in Skype was sold for about $1.9 billion, a very good sum considering all of the legal troubles the service is in. Finally, eBay Marketplaces, the company's auctions unit, dropped in revenue by 1 percent to $1.36 billion. The company notes thought that Marketplaces saw a big rise in fixed-price transactions on which it has been focusing lately.