Hayman drives up eBay Enterprise’s sales and revenues



eBay Enterprise helps traditional retailers

In 2Q14, eBay (EBAY) appointed Craig Hayman president of eBay Enterprise. Hayman previously held leadership positions at IBM’s Industry Cloud Solutions and WebSphere businesses.

eBay Enterprise helps traditional retailers develop and maintain online shopping sites. It also provides a variety of services such as marketing, customer care, and payments processing to these clients. Some of its clients are iRobot (IRBT), Dicks Sporting Goods (DKS), and RadioShack.

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Enterprise growth paces up in last two quarters

In June 2011, eBay acquired GSI Commerce, which the company later named eBay Enterprise. eBay Enterprise generated $1.9 billion in gross merchandise sales for its clients. Gross merchandise sales in 4Q14 were up 9%, driven by the addition of new logos and same-store sales growth of 12%.

Revenue was $443 million, up 9%. Segment margins for eBay Enterprise were at 15.5%, relatively flat from last year.

As shown in the chart above, eBay Enterprise’s revenues didn’t grow much in the earlier quarters. Since the appointment of Hayman, revenue has grown in the last few quarters compared to respective year-ago quarters.

eBay Enterprise’s revenue growth has been minuscule compared to eBay’s overall double-digit revenue growth for the last few quarters. But it’s interesting to see that Hayman is bringing a sharper strategic focus to how eBay Enterprise can compete and win as a leading commerce partner to brands and retailers.

During eBay’s earnings call, management said the company has decided to explore strategic alternatives for eBay Enterprise, including a full or partial sale or IPO (initial public offering).

For a diversified exposure to eBay, investors can consider ETFs such as SPDR S&P 500 (SPY). This ETF invests in the 500 largest US companies, and the technology sector makes up 18% of the fund’s portfolio. Investors can also consider ETFs such as the Dow Jones Internet Index Fund (FDN), which has about 5.3% of its portfolio invested in eBay.


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