EBay Inc. on Wednesday said that its first-quarter profit rose 20 percent on reinvigorated growth at its namesake e-commerce website and further swift growth at its PayPal payment service.
Revenue from the company's marketplace business, which is its largest and includes eBay.com, climbed 12 percent to $1.55 billion -- well ahead of the single-digit growth eBay reported in the second half of 2010.
The company has been working to improve the buying and selling experience on eBay.com by cutting upfront listing fees it charges sellers, improving its search engine and revamping its home page.
The company said gross merchandise volume, which measures the value of all goods sold on eBay, excluding vehicles, rose 8 percent to $14.5 billion. Though eBay's roots are in the online auction business, more than half of the transactions on the site these days are fixed-price sales.
In an interview, eBay CEO John Donahoe said the growth shows consumers like the changes the company has made.
For the company as a whole, net income in the January to March period was $475.9 million, or 36 cents per share. That compared with $397.7 million, or 30 cents per share, in the first quarter of 2010.
Excluding special items, eBay earned 47 cents per share -- a penny more than what analysts polled by FactSet expected.
Revenue rose 16 percent to $2.5 billion, essentially in line with analyst expectations.
Revenue from PayPal, eBay's online payment business, jumped 23 percent to $992.3 million. This business, which includes PayPal and short-term credit service Bill Me Later, has grown swiftly as merchants and consumers use it both on and off eBay. In the next few years, eBay expects the unit's revenue to surpass that of the marketplace unit.
PayPal's total payment volume rose 28 percent to $27.4 billion, and by the end of the quarter, the number of active users had risen 16 percent year over year to 97.7 million.
The mobile market for both PayPal and marketplaces is growing, too, as consumers are using eBay and PayPal mobile apps on smartphones and tablet computers. Donahoe reiterated a prediction he made in January, saying he expects $4 billion worth of goods to be sold through the eBay.com mobile apps in 2011, which would be double what eBay saw last year.
Consumers "like having, in essence, a store in their pocket," he said.
He expects PayPal's mobile apps, meanwhile, to process $2 billion worth of payments -- more than double the $750 million they handled in 2010.
San Jose-based eBay also predicted that its second-quarter revenue could beat Wall Street views: It's looking for $2.55 billion to $2.65 billion, while analysts have been expecting $2.52 billion.
EBay predicted a profit of 36 or 37 cents per share, or 45 or 46 cents excluding items. Analysts were hoping for 46 cents per share, excluding items.
EBay shares rose 7 cents to $34.10 in after-hours trading. The stock had finished regular trading up 95 cents, or 2.9 percent, at $34.03.