What Is Driving Growth For eBay Following The PayPal Spin-Off?
eBay (NASDAQ:EBAY) spun off PayPal as a separate entity in 2015, citing a board review that determined the spin-off to be in the best interest of both businesses and the company’s shareholders. After the separation, eBay’s marketplace business has been the key driver for the eBay, with revenues growing to $8.5 billion in 2018 from $7 billion in 2016, at a CAGR of 9.7%. The marketing and advertising business has also seen a healthy CAGR of 8.1% over the same period, with revenues reaching $2.3 billion in 2018 from $1.9 billion in 2016.
Going forward, we expect that as eBay is able to offer payment solutions besides PayPal, eBay’s marketplace division is likely to see a surge in volumes. While the company’s management expects 2019 to be a year of consolidation, going into 2020 the company has laid out plans to combat competition from the likes of Amazon and utilize the opportunities arising from the termination of the PayPal contract to the hilt. As we show in our interactive dashboards, we expect eBay’s marketplace revenue to grow to $9.2 billion in 2019 (+8.2% y-o-y). You can modify any of the key drivers to visualize the impact of changes on its revenue, and see all of our technology company data here.
Activist hedge fund Elliott Management’s recent comments suggest that the company may also be considering divesting its StubHub and Classified businesses to completely un-encumber the marketplace business. The strength of the marketplace business and its potential to be sold off independently may have been what attracted Elliott to eBay in the first place.
See More at Trefis | View Interactive Institutional Research (Powered by Trefis)