EBAY'S TRANSFORMATION: When Do We Start Calling eBay A Payments Company?

Alexander Cocotas | Dec. 31, 1969, 7:00 PM | 3 |

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eBay announces earnings tonight, but let's take a step back first and look at how the company's business is changing.

Since acquiring PayPal in 2002, eBay's payments business has gradually been turning out an ever larger share of the company's revenue--37.5% in 2010 up from 20.2% in 2003. Over that same period, the payments business grew at a compound annual growth rate of 34.2% versus 18.7% for marketplaces. We estimate that the payments business will form approximately 40% of 2011 revenues, which would be even higher were it not for the GSI Commerce acquisition. 

Both segments had impressive growth through 2007. Since then however, the marketplaces business has basically flatlined with payments now forming the lion's share of top line growth. We only expect this trend to accelerate as PayPal continues its push into big box retailers and capitalizes on the potentially humongous mobile payments market.

See our eBay earnings preview here.

eBay Revenues By Segment

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