eBay Inc (EBAY)’s Q4 2014 Earnings Call Transcript

Bob Swan
Heath, on the growth profile, maybe on the merchant side and on the consumer side. On the merchant side, just geographically, you see more growth outside of the U.S. than you see in the U.S. So PayPal’s global footprint continues to expand. From a size standpoint, large merchants, we’ve gone from roughly 0 to almost 70% penetration on large merchants in the large developed markets. So large merchants, size of merchant becomes increasingly relevant. And then in the developer community and particularly where Brain tree pulls us through into the shared the economy, it’s a different set more, can be more service oriented versus merchants that are strictly product oriented.

So on the merchant side, geographic, more international, size, more large and type increasing service versus just product. On the consumer side, just from the nature of the growth in mobile, you see that the increased frequency of PayPal’s user is increasingly technology savvy and has embraced mobile. And product, coupled with that dynamic and the customer base, has allowed the PayPal consumer to be more technology savvy. But I would maybe follow up on John’s point that we’ve made tremendous progress on the merchant side. But with Dan on board on the consumer side and the relevancy of PayPal products to consumers to use more frequently is where Dan is spending a lot of his time in his first 75 days or so.

Operator
Our final question comes from John Blackedge of Cowen and Company.

John Blackedge – Cowen and Company
Just a couple of questions. What are the specific plans to effectively rebuild demand in the active buyer base at the Market Place business? And what percent of active buyers are considered core shoppers? And the second question will be kind of with the benefit of time since the separation agreement, how do Devin and team think about longer-term Marketplace GMV and top line growth potential, 2016 and beyond, acknowledging the recent growth challenges and restructuring?

John Donahoe
Thanks, John. On your first question, Devin and his team are ruthlessly focused right now on rebuilding demand for the active buyer base. But as I mentioned earlier, the core eBay customer got through the passive reset and they’re buying with more or less the same frequency as they’ve had. And it’s the infrequent shopper, the one that maybe comes 2, 3, 4x a year, tends to come in the holiday season, they didn’t come back at the rate we thought even though we ran some brand campaigns, we ran some.
So 2015, Devin and the team will continue strong marketing spend, consistent with the levels of 2014, more focused on the top of the funnel. We’ll continue to fill that SEO and those 2 things driving traffic.

In addition, the product, as I mentioned earlier, the iPad new product is a good example of gearing more towards more the infrequent or new user that’s not familiar with eBay. So Devin and team are trying to make the new person that’s never used eBay, when they first arrive at eBay, make it easy, intuitive to use. And so both marketing and product are very focused on that.
And then with respect to the longer-term growth rates and plans, very consciously, Bob and I have tried to provide a lot of detail today in 2015 guidance so that you’ve got a sense of what we, Devin and Dan are committed for, for 2015. There’ll be stability and continuity through this year, through the separation process, and we tried to provide joint guidance and also by business unit. And then we’ll leave 2016 and beyond for when Devin and Dan come out and speak to you in roughly the second quarter, in advance of separation. So I’ll leave the answer to that question until then. So with that, I think we’ll wrap up. Thank you, everyone, and we’ll talk to you in 90 days.

John Blackedge
Thank you.

Unidentified Company Representative
Thank you.

Operator
Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today’s program. You may all disconnect. Everyone, have a wonderful day.