EBay revenue up, but takeover weighs down profit
SAN FRANCISCO – Online auction powerhouse eBay reported on Wednesday that its revenue climbed but profit dipped in the recent quarter due to its purchase of interactive services firm GSI Commerce.
EBay said that revenue rose 25 percent to $2.8 billion while net income was pulled down to $283.4 million in the fiscal quarter ending June 30 because of charges related to the multi-billion-dollar GSI acquisition.
Online financial transactions services unit PayPal topped 100 million active registered accounts and brought in more than a billion dollars in quarterly revenue for the first time, eBay chief executive John Donahoe said in a release.
“We also strengthened our portfolio in Q2 with acquisitions that we believe will more broadly position us to enable the future of commerce.”
EBay’s stock price drooped more than two percent to $32.43 per share in after-hours trading that followed release of the earnings figures.
EBay announced in March that it is buying GSI, a provider of electronic commerce and interactive marketing services, for $29.25 a share or $2.4 billion.
The San Jose, California-based eBay said the acquisition will be financed with cash and debt and is expected to close in the third quarter of the year.
Donahoe said at the time that the acquisition of GSI “will significantly strengthen our ability to connect buyers and sellers worldwide.
EBay said it will divest 100 percent of GSI’s licensed sports merchandise business and 70 percent of ShopRunner and Rue La La as part of the acquisition.
GSI has more than 180 customers across 14 merchandise categories including a number of leading retailers and brands.
Earlier this month, eBay said that it has agreed to buy mobile payments provider Zong for $240 million in cash.
“With Zong, PayPal will have greater ability to offer consumers even more choices in how they want to pay,” PayPal-owner eBay said in a statement.
Zong, which is based in Menlo Park, California, offers mobile payments options for digital goods and services in 21 languages and 45 countries.
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