PayPal revenue could double by 2013
EBay expects its payment division to outperform its core e-commerce business as it becomes 'the wallet of the cloud.' Shares soar 7%.
By Jeanine Poggi, TheStreet
EBay's (EBAY) PayPal business is poised to surpass the core business in the next three to five years, CEO of the e-commerce giant said at Thursday's analyst meeting.
Overall, revenue at PayPal is expected to grow from $3.4 billion in 2010 to between $6 billion and $7 billion in 2013, president of the division, Scott Thompson said on eBay's campus. PayPal is also expected to meet its goal of $4.2 billion in revenue in 2011.
Thompson's biggest message is turning PayPal into "the wallet of the cloud."
By the end of 2011, we can also expect to see PayPal at point of sale. Thompson said that if PayPal gets just 1% of retail sales, it would double the size of its business.
Fashion is expected to be the next big frontier for PayPal, following the success in the category at eBay's core marketplace, says Ed Eger, PayPal's senior vice president and general manager.
Edger says PayPal is adding about 1 million active users a month and is attempting to attract more active users.
PayPal is also looking to transform the way people use money. "I want to change money," says Sam Shrauger, vice president of global product and experience. "It could be so much better than it is now. Maybe in the future it can be cool. Right now, it's a pain."
Shrauger says PayPal's success has been driven by powering payments for social gaming on Facebook and Zynga.
In the fourth quarter, PayPal total revenue and total payments volume exceeded expectations, with 94.4 million active registered accounts, adding approximately 1 million active accounts per month. PayPal's net total payment volume was $26.9 billion.
EBay is hosting its first analyst day in nearly two years. Wall Street is awaiting a three-year snapshot of the company.
Since the e-commerce giant's last meeting in March 2009, its share price has tripled, its marketplace segment has stabilized and its PayPal/payments business has become even more dominant. eBay also spun off its Skype business and its cash has ballooned to more than $7 billion.
Shares of eBay were rallying 7.3% to $34.27 in afternoon trading.
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