With eBay (NASDAQ:EBAY) scheduled to announce its Q3 2011 earnings results later this month, and we will be closely following whether or not the company is en route to delivering its targeted mobile payment volume (Mobile TPV) of $3 billion through PayPal. [1] Mobile TPV is even more important to eBay now given that Google (NASDAQ:GOOG) Wallet is entering into the fray. eBay might also see Alibaba as a future competitor in the U.S., which could be looking to expand in western markets as speculation over Yahoo’s (NASDAQ:YHOO) sale continues to rise.
We currently have a price estimate of $39 for eBay’s stock, which is about 30% above the current market price.
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eBay Has Strengthened Its Mobile Payment Business, But Competition Rising
The third quarter saw PayPal reinforcing its mobile payments segment with strategic acquisitions such as Zong. However, stiff competition is in the offing from one of the biggest tech giants – Google. Despite initial security & scale hurdles, Google Wallet has the potential to become a predominant choice for users’ mobile payments given the relationships it has already forged with credit card giants such as MasterCard (NYSE:MA).
Additionally, eBay can also see a rather unexpected competitor emerging through the speculated sell-off of struggling internet giant Yahoo. With Alibaba being touted as one of the possible bidders for Yahoo, the company is very much looking at an expansion opportunity in the U.S. through Yahoo’s +680 million monthly unique visitor base.
Alibaba CEO Jack Ma has expressed this interest as recently as a couple of weeks ago and while Q3 might not be affected materially, eBay might be seeing serious competition towards the end of the year from the Chinese e-commerce giant. [2]
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