eBay: We'll Triple Our Share of E-Commerce

The share of the "addressable" online market that eBay (Nasdaq: EBAY) owns is poised to triple in the next four years, the auction leader's chief financial officer said Tuesday.

Speaking at the JPMorgan H&Q Technology Conference in San Francisco, California, eBay CFO Rajiv Dutta reportedly told analysts and institutional investors that the total value of goods sold on the Internet, in categories serviced by eBay, was $1.6 trillion last year.

That figure will reach the $2 trillion mark by 2005, Dutta said, according to published accounts.

Big Fractions

"So far, we've had very low penetration of a huge addressable market," Dutta reportedly said.

In fact, eBay said that it has less than one half of one percent penetration in the market for everything in eBay's product categories that can be sold online, including cars, houses, collectibles and other items. Dutta said that eBay's hopes to see its penetration rate grow to 1.5 percent by 2005.

If both predictions hold up, that would make eBay responsible for facilitating the sale of $30 billion worth of goods by 2005.

Large Appetite

"That's a really ambitious goal," Morningstar.com analyst David Kathman told the E-Commerce Times. "In order to meet it, eBay would have to make a lot of progress in moving beyond collectibles."

The optimism from San Jose, California-based eBay comes as it continues to be one of the strongest performers in any corner of the e-commerce space.

In late April, eBay reported record revenue of $147 million for the first quarter, a 90 percent jump from the year before, and said that it could outpace earlier estimates for the rest of 2001 by as much as $15 million.

Tall Order

While eBay has said that it remains committed to its core and original person-to-person auction business, it has added substantial fixed-price offerings during the past six months -- expanding Half.com, an e-tailer it bought in 2000, to include electronics, computer equipment, sporting goods and trading cards.

Kathman noted that eBay is already well into its long-range plan to sell "newer, higher-ticket items like cars and computers and even real estate."

Added Kathman: "But tripling your share of the total online e-commerce market in a few years is a tall order, and not a foregone conclusion by any means. If they can do it, I'll tip my hat to them."