eBay US site dominates rising profit

Online auction site eBay.com has reported another profitable quarter, but said the financial performance of its European operations remained tiny compared with its US operations.

eBay's second quarter net profit hit $11.6m, compared with $816,000 in the same quarter a year ago and $6.3m in the first quarter of 2000. The profit came on the back of a near 100 per cent increase in revenue, up from $49.5m in the second quarter of 1999 to $97.4m in the same period this year.

The results beat Wall Street expectations, but they were described only as "solid" and the news failed to boost eBay's share price, which has suffered along with the general decline in technology stocks this year.

Most of the firm's core revenue is still generated in the US. In all, some $1.3bn worth of goods were sold in 62.5 million auctions held on the site between April and June this year, representing rises of 108 per cent and 115 per cent respectively on second quarter 1999 figures.

Meg Whitman, chief executive at eBay, told the US press that the company was starting to see "nice growth" in its international sites - particularly those in Germany, the UK and Canada - but that they remain a very small part of overall company revenue.

A battle royal is currently being waged to establish auction market dominance in Europe between eBay and QXLRicardo.

Analysts at Forrester Research predict that US sales alone may be worth $19bn by 2003, which would account for more than 13 per cent of all US online retailing revenue. Allowing for the European market's usual time lag, it could mean significant auction traffic in Europe within five years.