Investors of eBay headed into the end of last year with some trepidation. The concern: an 800-pound-gorilla named Google (GOOG) would give eBay a drubbing during the 2006 holiday season. The search giant aggressively moved into eBay’s (EBAY) e-commerce territory in 2005 with a product-listing service called Google Base. Last year, it stepped up the challenge, launching Google Checkout, a competitor to PayPal, eBay’s online payment processing service. The new offering was dubbed by press as a PayPal “killer” before it even debuted.
But eBay kept that gorilla in check in the fourth quarter, judging from results released Jan. 24. The company said sales rose 29%, to $1.72 billion, exceeding analysts’ expectations. The amount, which was about half a billion higher than what analysts were anticipating on average, grew 29% from last year. For the full year, revenue grew 31% from 2005, reaching $6 billion and meeting what CEO Meg Whitman called an internal company goal for “6 (billion) in ’06.” Investors liked what they heard, propelling eBay shares 13.3%, to $33.98, in extended trading. The stock gained another 7.8% on Jan. 25, to $32.35 in afternoon trading on the NASDAQ.