EBay Inc (NASDAQ:EBAY)’s Long Term Prospects Under Scrutiny On PayPal Holdings Inc (NASDAQ:PYPLV) Spin Off


Dallas, Texas 07/17/2015 (Financialstrend) – eBay Inc (NASDAQ:EBAY) might have posted second-quarter earnings that beat Wall Street estimates, but that could not stop a dark cloud of uncertainty from filling the air over the company’s long-term prospects. The street waits to see how the company will reacts and performs on spinning its payment unit PayPal Holdings Inc (NASDAQ:PYPLV) as well as offloading its enterprise unit for $925 million.

 Deceleration in Buyers Growth

Ebay continues to face challenges in the e-commerce space having come under pressure from immense competition from Amazon.com, Inc. (NASDAQ:AMZN). Operating as a standalone brings with it a string of challenges as the company will have to device clear cut strategies of dealing with emerging e-commerce upstarts. Ever since Google Inc (NASDAQ:GOOGL) changed the way it shows its search results, business has not been the same for eBay.

 The company has had mixed success in its push to convince some of the biggest brands in the world to sell the goods on its platform.   The growth in the number of buyers in the platform seem to have slowed the e-commerce giant having recorded a 6% increase, less than half the rate registered in the second quarter of last year.

 Amazon sales should clock the $100 billion mark this year, which could see the company control a market capitalization of $221 billion. EBay Inc (NASDAQ:EBAY) sales, on the other hand, are expected to fall below the $10 billion mark translating to a $35 billion market cap.  An indication of how Amazon continues to pose the biggest threat in terms of competition to eBay.

 EBay Big Plan

EBay might have made progress in the second-quarter in terms of sales growing by 6%, but Marketplaces president Devin Wenig is quick to admit that there is a lot that needs to be done to achieve full potential. As PayPal goes its way, eBay Inc (NASDAQ:EBAY) is planning on growing its competitive advantage expected to drive more stable profitable growth.

 Mr. Wenig believes growth will be achieved by focusing more on small and medium size sellers who bring a mix of unique inventory from different brands to the site.

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