January 17, 2013 – eBay has ended 2012 on a high note as shoppers looking for bargains flocked to its online shopping center and used its digital payment service helping lift the company’s earnings for the fourth quarter above projections from analysts.
The latest results helped make the year the best yet for the company, which was a pioneer in e-commerce founded back in 1995 when the idea of purchasing merchandise online still seemed to be absurd. Since then, shopping online has become commonplace for millions of consumers that have turned eBay into a huge success and a favorite on Wall Street.
However, the growing popularity in tablets and smartphones is changing how many people are shopping. In an attempt to remain the leader in this shift, eBay is retooling its online shopping experience and its popular payment service used by millions – PayPal – to better work with today’s mobile devices.
eBay, which is San Jose, California-based, said the mobile application was downloaded to over 120 million mobile devices allowing consumers to easily reach its pay service, even while perusing the aisles of the traditional brick and mortar stores.
CEO John Donahoe said the new norm is mobile and eBay is leading the new way that consumers are shopping and paying for their merchandise. The CEO predicted that eBay’s marketplace division and PayPal, would each process in excess of $20 billion in annual mobile transactions.
eBay does not retain all of the revenues running through its services. PayPal charges its merchants a fee to deliver payments from their customers. eBay collects its own fees for the products that are listed and then sold online.
The stock for eBay increased 68% during 2012, as investors were impressed with the way the company made strides in the mobile market. During the fourth quarter the company earned $757 million or 57 cents a share.
However, that was down from income of $2 billion last year or $1.51 a share. However, the earnings for 2011 during the fourth quarter were inflated thanks to a windfall in a sale of $8.5 billion for Skype the online communications network to Microsoft.