updated - October 31, 2020 Saturday EDT
E-commerce giant eBay cut is revenue forecast on Wednesday, Oct. 15 following several challenges like tough competition and a recent cyber attack this year.
The issues arise as eBay sets everything up to spin off its PayPal division. eBay prepares PayPal payment system, which has been deeply incorporated in one of the biggest online marketplaces to run as an independent company
As of the moment, eBay foresees $17.95 billion revenues this quarter compared to last quarter's forecast of $18.3 billion. eBay shares dropped down 1.2 percent in after-hours trading.
Meanwhile, eBay chief executive John Donahoe states that the hurdles eBay is facing now are both unplanned and unexpected. "Its growth is neither what we wanted nor what we expected," Donahoe said in a statement.
eBay has previously dealt with a hacking problem last May regarding its e-commerce web site prompting their clients to change their passwords for security purposes.
The cyber attack, which as the executives stated, became a bigger issue than they expected it. It led the company to change its online login process and provide additional customer service.
Aside from that, the online giant was also reported to have issues with a sudden change in Google's search algorithm which led to a lesser capability to get Google's users to visit eBay.
As a response, ebay decided to increase marketing expenses this quarter to "dig our way out of the cyber attack and [search engine optimization] changes impacting us in the second quarter," stated chief financial officer Robert Swan.
Furthermore, eBay was reported that a significant branding campaign this year was already in its works.
Amidst the increasing amount of PayPal payments by 29 percent last quarter, the amount of good actually sold in its marketplace experienced a slight growth of only 9 percent.
As for eBay, the issue brought about by tough competition and newer trends further hurt its plans for growth. The upcoming Apple Pay which allows users to pay online using their iPhones without having to use PayPal as a medium
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