eBay Earnings Preview: Marketplaces Segment Could Continue To Drag Earnings

Though we expect its payments division PayPal to report strong growth, its marketplaces segment is likely to show sub-par growth. This, in all likelihood, could be due to the continued impact of the security breach and changes in the Google SEO (i.e., Search Engine Optimization) algorithm that hit eBay earlier this year and led to reduced traffic levels on eBay’s sites. We also expect eBay to face profitability pressure during the fourth quarter due to a surge in sales and marketing expenses to curb the fall in traffic on eBay’s marketplaces.

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