Paypal strong in eBay second quarter earnings, new product on the way

eBay‘s goal is to bring in $15 billion in yearly revenue by 2013, eBay chief executive John Donahoe said today. PayPal and a new unannounced product that will bring eBay offline might take them there, according to the company’s second quarter earnings report.

Revenue grew 25 percent from $2.3 billion in the second quarter last year to $2.8 billion in the second quarter this year ending June 30. Net income fell 19% after eBay acquired 6 new companies. The purchase of eCommerce platform, GSI, played a big part in this decrease, Donahoe said.

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Revenue from eBay’s three business units —  payments, marketplaces and GSI — all rose. Revenue from payments and marketplaces rose 34 percent and 19 percent respectively, while the fledgling GSI brought in $24 million in revenue for the company.

PayPal made $1 billion for the first time in the second quarter this year. The service also passed 100 million active users. Nine million merchants worldwide use PayPal, with mechant services accounting for over two-thirds of PayPal’s operations. Mobile payments in particular are booming for the payments service, which has 8 million users. eBay said Paypal mobile payments will grow to more than $3 billion this year, compared to $750 million spent in 2010.

While Paypal’s senior director Laura Chambers rolled out a new near field communications payment product at the MobileBeat conference this year, eBay doesn’t believe NFC will catch on with stores all that quickly, Donahoe said.

“I don’t think that you’re going to see NFC with large merchants,” he said. “You don’t want anything that has friction at point of sale.”

Cue eBay’s next product. Through its recent acquisition of local shopping service Milo, the company is developing a comprehensive point of sale product to be released next year, Donahoe said.

“We’re creating products that can handle card or mobile at point of sale,” he said.

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That might indicate that PayPal will release a Square competitor next year.

Details about the product were slim, given that it is still early days, but it’s currently in testing with an unnamed top US retailer.

For the second half of the year, eBay will be investing in marketing initiatives and plans to be on television in late third quarter, early fourth. Donahoe said eBay is “playing offense” this year.