Ebay keeps spending

EBAY, the world’s largest online marketplace, forecast fourth-quarter sales and profit last night that missed some analysts’ estimates as it spends more on marketing products to woo developers and strengthen its payment services.

Revenue will be $3.2 billion to $3.35bn (€2.3bn to €2.45bn), the company said yesterday in a statement. Excluding some costs, profit will be 55 cents to 58 cents a share. Analysts on average had projected sales of $3.3 billion and profit of 58 cents, according to data compiled by Bloomberg.

Chief executive John Donahoe is leading a turnaround of the e-commerce company, whose stock had plummeted 83% in five years to a low of $10.27 in 2009.

Investors are sceptical that Ebay can smoothly integrate acquisitions made in the past year and expand its reach beyond merchants and sellers to developers, an effort to increase use of its programs on other internet sites and online stores.

“Ebay has significant integration risk involved with its recent acquisitions including GSI Commerce, Magento and Zong,” Anthony DiClemente, an analyst with Barclays Capital in New York, wrote in a note last week. “We would like to see more tangible products, services and indications of interest from major retailers.”

Ebay shares fell as low as $31.21 after the report. The stock fell 2% to $33.18 at the close in New York. Shares of the San Jose, California-based company have climbed 19% this year.