Here's Why eBay Is In Trouble
eBay reported earnings for the fourth quarter of 2014 on Wednesday night, and it was mostly brutal news from the online marketplace. The company's revenue fell short of expectations, and the company announced it will cut 2,400 jobs, or 7% of its total workforce, early this year.
So why is eBay's outlook so bad? Just take a look at the company's gross merchandise volume (GMV), which represents the total value of goods sold — it's a good indicator for how healthy an e-commerce site like eBay is doing. Based on the company's data charted for us by BI Intelligence, eBay's GMV growth has slowed down considerably to just 2% year-over-year, down from 13% year-over-year growth in the fourth quarter of 2013.
Even though this is bad news for eBay, BI Intelligence believes this could make it a more attractive target for an acquisition once it splits from PayPal later this year. Though eBay faces increased competition and, last year, suffered a massive security breach, it is still a household name that could help a company's standing in the e-commerce market for a relatively cheap price tag.
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