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EBay Nets A Fourth Quarter Winner

By: David Utter

Net income of $346.5 million easily moved past analyst expectations for the fourth quarter of 2006, and the online marketplace also recorded 29 percent year over year revenue growth to $1.72 billion.

eBay Nets A Fourth Quarter WinnerGood times were had by eBay in the end of its fiscal year. Earnings of 25 cents per share for Q4 2006 beat the same period last year by 5 cents.

A big part of eBay's revenue during the holiday shopping season came through PayPal, its payment processing unit. PayPal delivered $417 million to the bottom line, roughly a quarter of eBay's revenue for the period.

Skype also made a contribution to revenue. The VoIP company eBay acquired in 2005 tacked on $66 million in revenue, and represented the fourth straight quarter Skype's revenue improved from the previous quarter.

EBay said in its presentation their 222 million users, 97 million of them in the US, grew by 23 percent year over year. They added 41 million users for all of 2006. Also, PayPal now has 133 million users, 86 million in the US.

That growth comes in a year where eBay battled complaints about its customer service, and a handful of fee increases that also angered its sellers. Despite these challenges, people still flocked to the site.

It's a testimony to eBay's ubiquity and dominance that it can continue to attract people year after year. Despite a wide-open Internet and a well-publicized failure in China, eBay remains a power with no real challengers to its place at the top.


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