eBay Pushes into Europe After Beating the Street

Riding high on this week's favorable financial reports, online auctioneer eBay announced Wednesday that it will aggressively expand its already-booming European operations.

According to eBay, sales in the company's two current European markets, Great Britain and Germany, surged 84 percent to $86.92 million (US$) in the first quarter, while the number of registered users was up more than 50 percent to 966,100.

By the end of this year, the auction giant says it will set up shop in at least two additional countries and offer its European members the option of placing bids from wireless devices.

Q1 Strength

The announcement of the European results followed eBay's Tuesday reports of a 100 percent jump in first-quarter revenues and first-quarter earnings growth of 67 percent.

The company saw the dollar amount of merchandise moving through its Web sites double to $1.15 billion, and announced a 2-for-1 stock split.

"The company is firing on all cylinders," CEO Meg Whitman said.

B2B Boost

eBay's European sales were boosted by the addition of business-to-business (B2B) sales of industrial equipment and big-ticket items such as used cars, the company said. The number of overall listings dropped, however, after listing fees were introduced halfway through the quarter.

eBay said that eBay Germany, which recorded $63.97 million in sales in the first quarter, is now the number two auction site in the world, trailing only the eBay parent company. Sales in the UK reached $11.44 million.

Wireless Move

In what could well create the auction service's largest single market, eBay intends to open sites in Italy and France by the end of 2000 and move into Scandinavia as early as next year.

Europe will also likely be the first market where eBay offers members the opportunity to bid from wireless devices. Senior Vice-President International Steve Westly said that by July, "eBay Anywhere" could be up and running in Germany and England.

That scenario would put eBay in a strong position to capitalize on what some see as the next wave of e-commerce. In a report released earlier this month, International Data Corporation (IDC) said that by the end of 2002 there will be more people accessing the Net via wireless than wired Internet users.

Suits and Investigations

Despite the positive news, eBay has faced its share of hurdles lately. A group of sports collectors filed a $100 million suit against the auction house last week, saying it knowingly allowed the sale of fake sports memorabilia.

Additionally, last month, federal and local authorities began investigating reports of fraudulent sales made on eBay.