Election Section

eBay executives unveil aggresive long-term expansion targets

By Brian Bergstein The Associated Press
Tuesday October 30, 2001

SANTA CLARA — EBay Inc. executives affirmed their aggressive long-term growth targets Monday and detailed plans to expand the sales of cars and other high-ticket items on the trading Web site. 

At the company’s annual meeting with financial analysts, chief executive Meg Whitman said she is even more confident than she was last year that revenue can reach $3 billion by 2005. 

One reason is that the company’s 24 international sites are not yet as profitable as eBay expects they will be in coming years. 

“We are really proud of the foundation we have built,” Whitman said. “It was in 2001 that eBay really hit its stride.” 

The chief financial officer, Rajiv Dutta, said he expects revenue to grow about 50 percent next year, to between $1.05 billion and $1.10 billion, with earnings per share of 70 cents to 73 cents. 

The average estimate on Wall Street was for earnings of 73 cents per share next year, excluding charges, on $1.03 billion in revenue, according to Thomson Financial/First Call. 

“The long-term potential of this business ... is nothing short of outstanding,” Dutta said. 

EBay shares fell $4.48, nearly 8 percent, to $52.52 on the Nasdaq Stock Market. The shares were down to $52.36 in the after-hours session. 

Executives said they will push to make eBay a more mainstream Internet shopping option, encouraging people to make the site their first choice for Web commerce rather than a place to turn mainly for hard-to-find items. 

They said they would concentrate on increasing auctions and fixed-price sales in key categories such as automobiles, computers and real estate. 

In hopes of becoming a “major player” in online auto sales, eBay will soon add a short-term warranty to cars bought on the site and make it easier for buyers to have roving mechanics certify cars, said Simon Rothman, head of eBay Motors. 

EBay already had said it would combine its separate Half.com site into eBay.com in the coming months to increase its listings of items at set prices. Executives said Monday that Half.com will be renamed eBay Express Buys. 

Analysts said they were impressed that the company was able to stick to its long-term targets while still taking a conservative approach to its finances. 

“It’s a cash machine,” said Jeetil Patel, Internet analyst for Deutsche Banc Alex. Brown. “Despite the economy, these guys are able to grow on a global basis.”