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EBay Results Beat Expectations

October 26, 1999

SAN FRANCISCO (AP) _ Online auction house eBay Inc. reported its third-quarter operating profits beat Wall Street expectations as new partnerships and expanded auction offerings such as cars and art led to a sharp increase in its registered users.

For the three months ended Sept. 30, San Jose, Calif.-based eBay reported net income of $1.35 million, or 1 cents a share, up from $476,000, or break-even, the comparable period a year earlier.

The company took charges during the current quarter for stock compensation plans and acquisitions. Excluding those, operating income was $3.2 million, or 2 cents a share, compared to $1.8 million, or 2 cents a share, the same period a year earlier.

EBay makes money by charging auctioneers for listings and taking a percentage of each sale. The results beat Wall Street expectations of 1 cents a share, according to a survey of analysts by First Call/Thomson Financial.

The company reported its registered users increased 509 percent from the same time last year, to 7.7 million from 1.3 million, with a record 2.1 million added in the most recent quarter. The number of auctions increased 292 percent to 36.2 million from 9.2 million in the previous comparable quarter.

Meg Whitman, eBay’s president and chief executive, said the company’s decision to expand its auction site to include premium and high-end items such as collector cars is helping keep it ahead of increasing competition who are ``all trying to muscle in on the large online market.″

``Despite the recent wave of competitive efforts, I am pleased to report that eBay’s leadership position remains firm and unchallenged,″ she said in a conference call.

EBay said it has added staff and redundant computer systems to try to prevent outages that have plagued its site. The company also is expanding to provide local auctions and service in large European markets.

Revenues jumped 169 percent to $58.5 million from $21.7 million. The company reported revenue from its auction subsidiaries fell during a seasonal lull, while costs of sales and marketing rose.

For the first nine months of the year, eBay reported net income of $5.9 million, or 4 cents a share, from $4.6 million, or 4 cents a share. Revenues rose to $150.8 million from $55.2 million.

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