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Earnings

eBay earnings: A hard bargain

eBay logo
eBay
  • Q1 revenue: $2.4 billion (-2% YoY, -16% QoQ, vs. $2.38 billion expected)
  • Q1 earnings: $485 million (-6% YoY, -11% QoQ, below expectations)
  • Q2 guidance: Between $2.38 billion and $2.48 billion in revenue, full-year guidance unchanged.

The big number: Millions are stranded at home, but that doesn't mean they haven't wanted to buy things. eBay narrowly managed to beat analyst expectations for revenue in the quarter, even during the pandemic. That being said, in its last earnings report, the company said it expected to generate between $2.55 billion and $2.60 billion in revenue in Q1, after Q4 revenue came in essentially flat quarter-over-quarter — so business isn't exactly booming. Shares in eBay fell more than 3% on the news in after-hours trading.

People are talking: "Given the uncertainty surrounding the extent and duration of the impact of the COVID-19 pandemic, it is difficult to predict what may result as shelter-in-place guidelines are eased and lifted and how global consumer demand, the effects of COVID-19 on the general economy, seller inventory and advertising spending may evolve over time," the company said in a release.

Opportunities: The majority of eBay's revenue comes from sales on its marketplace sites, and active buyers there grew by 2% in the quarter, to a total of 174 million global active buyers. Hopefully for eBay, more window-shoppers turn into paying customers in the coming quarter.

Threats: Though not its largest business segment, eBay's Classifieds business — which includes local buyer-and-seller exchanges around the world, like Gumtree in the U.K. — is unsurprisingly taking a hit in the time of social distancing. The segment posted revenue of $248 million for the quarter, down 3% quarter-over-quarter, and as long as people are still stuck under quarantine, it doesn't seem like they're going to be wanting to buy and sell things in person anytime soon.

Note that Q1 saw eBay complete the sale of the ticketing company StubHub to Viagogo for $4.1 billion. Windfalls like that don't come along every quarter.

The power struggle: Like every other company selling or marketing products during the pandemic, eBay is having to police what people are listing on its site, and has tried to mitigate the fallout of the coming recession on its sellers as much as possible. The company said it has pulled 15 million listings to date that "make false health claims or offer products at inflated prices." It's also deferred fees for hundreds of thousands of sellers to help with their cash flow. They are the backbone of the business, and eBay needs sellers to stay afloat during the pandemic for it to stay in the black.
People

Making the economy work for Black entrepreneurs

Funding for Black-owned startups needs to grow. That's just the start.

"There is no quick fix to close the racial wealth and opportunity gaps, but there are many ways companies can help," said Mastercard's Michael Froman.

Photo: DigitalVision/Getty Images

Michael Froman is the vice chairman and president of Strategic Growth for Mastercard.

When Tanya Van Court's daughter shared her 9th birthday wish list — a bike and an investment account — Tanya had a moment of inspiration. She wondered whether helping more kids get excited about saving for goals and learning simple financial principles could help them build a pathway to financial security. With a goal of reaching every kid in America, she founded Goalsetter, a savings and financial literacy app for kids. Last month, Tanya brought in backers including NBA stars Kevin Durant and Chris Paul, raising $3.9 million in seed funding.

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Michael Froman
Michael Froman serves as vice chairman and president, Strategic Growth for Mastercard. He and his team drive inclusive growth efforts and partner across public and private sectors to address major societal and economic issues. From 2013 to 2017, Mike served as the U.S. trade representative, President Barack Obama’s principal adviser and negotiator on international trade and investment issues. He is a distinguished fellow of the Council on Foreign Relations and a member of the board of directors of The Walt Disney Company.
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Building better relationships in the age of all-remote work

How Stripe, Xero and ModSquad work with external partners and customers in Slack channels to build stronger, lasting relationships.

Image: Original by Damian Zaleski

Every business leader knows you can learn the most about your customers and partners by meeting them face-to-face. But in the wake of Covid-19, the kinds of conversations that were taking place over coffee, meals and in company halls are now relegated to video conferences—which can be less effective for nurturing relationships—and email.

Email inboxes, with hard-to-search threads and siloed messages, not only slow down communication but are also an easy target for scammers. Earlier this year, Google reported more than 18 million daily malware and phishing emails related to Covid-19 scams in just one week and more than 240 million daily spam messages.

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Reinvention of Spending

How eBay used the pandemic to make checking out easier

The company's head of global payments, Alyssa Cutright, sees the broader digital shift as a boon to her efforts of bringing payments in house.

eBay's head of global payments Alyssa Cutright tells us about consumer finance trends.

Photo: eBay

The pandemic has upended everything — even plans companies have had to upend themselves. For consumers, eBay moving to manage its own payments stack means checkout will get a little easier. For the company, it means finally having a way to expand quickly and adapt to the pandemic.

In the years following its separation from PayPal, eBay has started to bring payment processing in-house. For the company's global head of payments, Alyssa Cutright, the endgame of that multiyear process means the company can expand into new markets more easily and simplify the checkout process by offering new forms of payment. But part of her playbook to do so had previously relied on having employees on the ground to help sellers with the migration.

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Kevin McAllister

Kevin McAllister ( @k__mcallister) is an associate editor at Protocol, leading the development of Braintrust. Prior to joining the team, he was a rankings data reporter at The Wall Street Journal, where he oversaw structured data projects for the Journal's strategy team.

Transforming 2021

Blockchain, QR codes and your phone: the race to build vaccine passports

Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.

One day, you might not need to carry that physical passport around, either.

Photo: CommonPass

There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.

Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.

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Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

Power

Sonos CEO Patrick Spence: There’s money in ad sales for us

The smart speaker maker adds in-house ad sales as radio service continues to grow.

"Given the kind of customer base that we have and given the adoption we've seen in Sonos Radio, there's absolutely advertising revenue there," Patrick Spence says.

Photo: Andrej Sokolow/Picture Alliance via Getty Images

Sonos is doubling down on its efforts to monetize services on its platform, and is now looking to build out an in-house ad sales team for its free Sonos Radio service. Sonos CEO Patrick Spence confirmed the news in a conversation with Protocol on Wednesday, saying that in-house ad sales could help the company attract the right kind of brand advertisers to its platform. "Given the kind of customer base that we have and given the adoption we've seen in Sonos Radio, there's absolutely advertising revenue there," he said.

Spence made these remarks ahead of the release of the company's fiscal Q4 2020 earnings results. The company grew its revenue 16% year-over-year, to the tune of $339.8 million for the quarter. Earnings per share came in at $0.15, ahead of the $0.02 that analysts had expected. The company added 1.8 million new households to its customer base in its fiscal 2020, and close to 11 million households now own Sonos products, with an average of 2.9 Sonos products in each of those households.

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Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

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