eBay: Fourth-quarter revenue rises, helped by PayPal, holiday shoppers

SAN FRANCISCO -- EBay said Wednesday that its fourth-quarter revenue rose 5 percent, as the healthy holiday shopping season bolstered growth in its online marketplace and PayPal online payments business.

The company's profit fell, since the year-ago quarter included a large gain from the sale of Internet communications business Skype. Excluding special items such as the Skype gain, eBay's fourth-quarter profit shot up 24 percent.

For the quarter that ended Dec. 31, the San Jose-based company earned $559.2 million, or 42 cents per share, compared with $1.35 billion, or $1.02 per share, in the year-ago quarter.

However, excluding one-time items, such as Skype, eBay earned 52 cents per share in the latest quarter, compared with 42 cents per share in 2009.

Analysts polled by FactSet expected an adjusted profit of 47 cents per share.

For the quarter that ended Dec. 31, revenue totaled $2.50 billion -- a bit higher than the $2.48 billion analysts expected, on average.

Revenue from eBay's marketplace business, which is its largest unit and includes its namesake website, rose 4 percent to $1.52 billion.

The company said gross merchandise volume, which measures the value of all goods sold on eBay, excluding vehicles, increased 6 percent to $15 billion.

EBay.com counted 94.5 million active users at the end of the year, up 5 percent from the same quarter in 2009.

The company has

been working to bolster eBay.com by cutting upfront listing fees it charges sellers, improving its search engine, revamping its home page and ramping up its focus on fashion with the launch of a clothing and accessory site, fashion.eBay.com.

But CEO John Donahoe said eBay is not done yet. During a conference call with analysts to discuss the company's quarterly results, Donahoe said he's still not satisfied with where eBay is in the U.S. e-commerce market.

Still, he said he thinks the company can continue to build on the changes it made last year, which he hopes will help the company "close the gap between our growth rate and that of e-commerce."

EBay's second-largest business, online payments, reported $971 million in revenue -- an increase of 22 percent from 2009. That unit includes PayPal and short-term credit service Bill Me Later.

Total payment volume rose 26 percent to $26.9 billion, eBay said, and PayPal had 94.4 million active registered accounts at the end of the year.

The online payments unit has grown speedily even while eBay's marketplace has struggled to bring in and retain buyers and sellers. Within the next few years, eBay expects the unit's revenue to surpass the marketplace unit.

For both businesses, mobile continues to be increasingly important. Donahoe said the company's array of eBay and PayPal mobile apps for smart phones has been downloaded more than 30 million times, and he said he expects $4 billion worth of goods to be sold through eBay.com's mobile apps this year, doubling from last year. For PayPal, mobile payments were five times as high in 2010 as in 2009.

Looking at the current quarter, eBay is projecting a profit of 34 cents to 36 cents per share, or 44 cents to 46 cents per share when excluding one-time items, on $2.40 billion to $2.50 billion in revenue.

Analysts expect an adjusted profit of 45 cents per share on $2.42 billion in revenue.

EBay shares rose 80 cents, or 2.8 percent, to $29.90 in after-hours trading. The stock finished regular trading down 35 cents at $29.10.

For the full year, eBay earned $1.80 billion, or $1.36 per share, compared with $2.39 billion, or $1.83 per share in 2009.

Revenue rose 5 percent to $9.16 billion in 2010.

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Nintendo 3DS to cost $250, out March 27 in US

Print   Email   Font ResizeBy Barbara Ortutay

Associated Press

Posted: 01/19/2011 08:20:16 AM PSTUpdated: 01/19/2011 11:44:39 AM PST
NEW YORK -- Promising to usher in a new era in 3-D entertainment, Nintendo says its glasses-free handheld 3DS will go on sale March 27 in the U.S. for $250. That's the same price that the revolutionary Wii console cost when it went on sale in 2006.

The president and chief operating officer of Nintendo of America, Reggie Fils-Aime, said Wednesday the 3DS is a "truly unique experience that doesn't exist anywhere else."

"This is a different kind of 3-D. Something you haven't experienced before. Not in theaters, not at trade shows." Fils-Aime told a crowd of journalists, bloggers and analysts in New York City. "Of course, there are no glasses."

The gadget features a touch screen on the bottom and a 3-D screen on top. It has three cameras, one facing the user and two facing outward. The latter two let you take 3-D photos, which can be instantly displayed on the screen. There's also an accelerometer and a gyroscope, which track players' movements and how they tilt the screen, so that they can see the 3-D games from different angles.

A "Mii Creator" uses photos you take of yourself to instantly create a cartoon avatar based on your image. Then you can adjust it as you like.

The 3DS includes new social features, including "StreetPass," which lets users exchange game information with other 3DS users nearby. For example, your Mii avatar or game high scores can appear on your friend's 3DS if they have also chosen to activate this

feature.

Nintendo said more than 30 games will be available for the 3DS by early June. Games will range from "Nintendogs + Cats," which adds feline companions to the popular puppy simulator to "The Legend of Zelda: Ocarina of Time 3D" to 3-D versions of EA's Madden NFL Football" and Capcom's "Resident Evil: The Mercenaries." Older games, including those for the original Game Boy, will be available for download.

The 3DS will be available in black and shiny aqua blue. It can play games from older DS systems, but they just won't be in 3-D. The 3-D gradient is adjustable on the 3DS, or it can be turned off completely. If your eyes don't adjust to the 3-D screen immediately, it helps to start out the games in 2-D mode and then slowly turn up the 3-D slider.

Nintendo recommends that children age 6 or younger should not play 3-D games because it could affect the development of their vision, similar to warnings issued by makers of other 3-D products.

But the American Academy of Ophthalmology says there are currently no conclusive studies on the short- or long-term effects of 3-D products on children's eye development or vision health. At the same time, if a healthy child develops headaches or can't see 3-D images, this could be a sign of an eye disorder, the group said in a statement this week.

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Steve Jobs leaves behind deep bench of talent at Apple

Steve Jobs is the man. As the public face of Apple, the revered visionary and sometimes enfant terrible has shown an ability to dream up, fine-tune, orchestrate and then unleash game-changing technology on the world.

The announcement that he's taken a third medical leave of absence in his ongoing battle with cancer now prompts the question: What sort of Apple does he leave behind?

Beginning with Chief Operating Officer Tim Cook, who will once again take over the reins, as he did when Jobs took a six-month leave to have a liver transplant in 2009, Jobs has put in place a deep bench of talent. Top executives such as design guru Jonathan Ive, Apple store creator Ron Johnson and software wizard Scott Forstall have collaborated closely to give Apple its bleeding-edge product line, its soaring stock price, its spit and its polish.

Most observers say Apple is on firm footing for the foreseeable future. They include industry analysts, academics and the scores of investors who swooped in Tuesday to shore up Apple shares beaten up after initial word of Jobs' medical leave.

But there are others, including former employees and consultants who have seen the Jobs magic up close, who now worry about the long-term prospects of an Apple without a leader who can seemingly peek around the next bend and give customers devices they didn't even realize we needed.

"Steve Jobs has obviously been an iconic leader in marketing and innovation and he always

had a stiff operating hand," said Barry Jaruzelski, management consultant at Booz & Co. "But I think those same skills that have made Apple so great over the decades have been institutionalized. Jobs is a symbol of them, but those capabilities are still there; they're not just the vision of one iconic individual." The team is in place

Yet a former Apple consultant, who has worked closely with Jobs and his inner circle on numerous advertising campaigns, said that while the company should be fine in the short term without Jobs, the picture further out is much cloudier.

"His absence does worry me," said the consultant, who asked that his name not be used. "The reason Apple is so successful is because of what Jobs does and doesn't do. What he turns down is as important as what he approves. I'd see him do that on a daily basis -- 'Let's do this, but not that.' "

Jobs, he said, "has this ability to look forward and really see what trends are coming. The management team in place will not be able to do that."

Piper Jaffray analyst Gene Munster said Jobs was "irreplaceable and a visionary that no one can touch. But they have people who can come close to Steve Jobs. The collective bench can do a lot of things Steve Jobs does. The key four, five guys -- they all share the same value Steve Jobs has, which is high-integrity products and simplicity. I think Apple will continue to be phenomenally successful," even without Jobs. "But it would be even better with him. He's a cross between Henry Ford and Willy Wonka."

From Cook, the admired COO who will assume responsibilities for day-to-day operations, to his marketing chief Philip Schiller, to Apple's creative legend and top designer Jonathan "Jony" Ive, the company is in good hands, according to most observers.

"We believe Tim Cook is a proven operator and very capable of managing Apple's day-to-day operations," Chris Whitmore at Deutsche Bank Equity Research wrote in a report Tuesday. He said Apple's "product road map for the next 12 months is largely set and Cook will ensure crisp execution on that road map."

Cook, who had already effectively been manning the day-to-day operations at Apple even while Jobs was on the job, will have plenty of help. Schiller, senior vice president of worldwide product marketing, has played a key role in the company's much-vaunted advertising and marketing campaigns that have ensured Apple products a place not just in the retail hit parade, but in the annals of tech history.

As senior vice president of industrial design, Ive has held center stage for Apple's parade of new launches. The longtime Apple veteran is the guy behind the mesmerizing smorgasbord of Apple gadgets. And Eddy Cue, vice president of Internet services, has been instrumental in helping Jobs work out thorny negotiations with the music companies, movie studios and publishers whose by-product comes streaming out of Apple's products.

Add in Scott Forstall, senior vice president of iPhone software, who spearheaded Apple's new mobile operating system that's in use on the iPhone, iPod touch, iPad and now the Apple TV; Bob Mansfield, senior vice president of Mac hardware engineering; and Bertrand Serlet, senior vice president of software engineers, and the team that Jobs put in place seems ready for anything.

Product pipeline set

Although Jobs' leave "creates uncertainty," said Peter Misek, an analyst for Jefferies & Co., "we believe the product pipeline is set for the next two years and Apple's bench strength has come through before."

Analyst Tim Bajarin agreed: "Even with Steve not there for the day-to-day, they won't skip a beat."

"Ron Johnson, one of the best minds in retail, is running the Apple stores; Peter Oppenheimer is running their financial side," Bajarin added. "Schiller's brilliant in marketing. And Ive is legendary in the areas of design and design integration.

"Even if Jobs takes an extended leave of absence, the company will move forward. And since the products that will be introduced this year and next and even in 2013 have already been on the drawing board for years and have met with Jobs' approval, any impact on the company from his absence won't be seen, in the short-term at least."

Staff writers John Boudreau and Troy Wolverton contributed to this report. Contact Patrick May at 408-920-5689. Follow him at Twitter.com/patmaymerc.

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China's Internet population rises to 457 million

Print   Email   Font ResizeAssociated Press

Posted: 01/19/2011 08:11:06 AM PSTUpdated: 01/19/2011 08:11:08 AM PST
BEIJING -- China's online population rose to 457 million in 2010 as use of mobile phones to surf the Web spread rapidly, an industry group reported Wednesday.

China's population of Internet users -- a group more than 50 percent larger than the whole U.S. population -- grew 19 percent in 2010 over the previous year, said the state-sanctioned China Internet Network Information Center.

The number of people surfing the Web by mobile phone jumped 29.6 percent over 2009 to 303 million, the group said.

The communist government actively promotes Internet use for business and education, though it operates an extensive censorship system to block access to material it considers subversive or pornographic.

The number of people using online commerce and Internet entertainment services also grew rapidly in 2010, CNNIC said. It said the number of e-commerce customers rose 48.6 percent over 2009, though it gave no total.

China's rapid rise in Web use has been driven by economic growth that forecasters say was close to 10 percent last year following the country's rapid rebound from the global crisis.

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2010 was 2nd-worst year for home construction in half-century

Print   Email   Font ResizeBy Martin Crutsinger

Associated Press

Posted: 01/19/2011 05:43:04 AM PSTUpdated: 01/19/2011 04:24:02 PM PST
WASHINGTON -- Builders began work last year on the second fewest number of homes in more than half a century, as the weak economy kept people from buying houses.

Builders broke ground on a total of 587,600 homes in 2010, just barely better than the 554,000 started in 2009. Those are the two worst years on records dating back to 1959.

And the pace is getting worse. The Commerce Department reported Wednesday that builders started work at a seasonally adjusted annual rate of 529,000 new homes and apartments last month. That's a drop of 4.3 percent from November and the slowest pace since October 2009.

In a healthy economy, homebuilders start about 1 million units a year. They built twice as many in 2005, at the height of the housing boom. Since then the market has been in decline.

Unemployment remains high. Record numbers of foreclosures have forced home prices down and tight credit has made mortgages tough to come by. Some potential buyers who could qualify for loans are hesitant to enter the market, worried that prices will fall further.

People are buying fewer single-family homes, which represent nearly 80 percent of the market. Demand fell 9 percent to an annual rate of 417,000 units. Apartment building increased 17.9 percent to an annual rate of 112,000 units.

The stagnation in housing is weighing on the overall economic recovery. Each new home built creates, on average, the equivalent of three jobs for a year and

generates about $90,000 in taxes, according to the National Association of Home Builders.

One positive sign is that builders appear to be planning more projects in 2011. Building permits, considered a good barometer for future activity, rose 16.7 percent in December to a seasonally adjusted annual rate of 635,000, the best pace since March.

But builders likely pulled more permits in California, New York and Pennsylvania ahead of code changes in 2011 -- a factor that likely influenced the spike.

"Some builders went ahead in December with projects to beat the change," said Jennifer Lee, an analyst at BMO Capital Markets. Lee points out that the biggest gains were in the Northeast, which was up 80.6 percent, and the West, up 43.9 percent.

Housing construction fell in all parts of the country in December except the West where activity surged 45.8 percent. Construction dropped 38.4 percent in the Midwest and was down 24.7 percent in the Northeast and 2.2 percent in the South. Severe winter weather likely affected activity in the Northeast and Midwest.

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Google appeals Spain's demand to take down links

MADRID -- Lawyers for Google went to court Wednesday in Madrid to appeal demands by Spanish authorities that the company delete links to websites containing information officials say violates Spaniards' privacy rights.

Google says it's the first case of its kind -- and a Spanish decision mandating the deletion of the links could hurt freedom of expression.

Spain's Data Protection Agency said it filed the orders against Google at the request of individuals who lodged complaints and because the original publishers of the material cannot legally be ordered to take them down.

The agency has issued 90 orders for Google to take down links. The National Court on Wednesday heard arguments from both sides on the first five orders to be appealed.

The cases include a surgeon who was absolved of charges of criminal negligence in a 1991 case but who sees a Spanish newspaper reference to the original case -- and not the acquittal -- whenever his name is keyed into Google's search engine.

Another case involved a woman who was denied a local government grant years ago but reference to the case and data about her keeps appearing in searches using her name.

Google's chief argument is that it is just an intermediary and that the original publishers are responsible for the content.

Google fears that a ruling against by the court would effectively give the U.S. search engine giant publisher status and make it accountable for the

material it provides on the Internet.

"We are disappointed by the actions of the Spanish privacy regulator. Spanish and European law rightly hold the publisher of material responsible for its content," Peter Barron, Director of External Relations for Google, said prior to the hearing.

"Requiring intermediaries like search engines to censor material published by others would have a profound chilling effect on free expression without protecting people's privacy," he said.

The five cases involved information published in newspapers or official gazettes.

Jose Antonio Perales, a lawyer for the data protection agency, said each of the five individuals claimed their dignity and privacy were affected by the fact that references to past events involving them continued to appear in Internet searches.

"We face a violation of fundamental rights," said Gabriel Gomez, a lawyer acting on behalf of the surgeon. "The Internet can't be a refuge for insults, threats or offenses."

But lawyers for Google pointed out that the data agency had not called on any of the news providers to modify or remove their content. They argued there are Internet tools available so that newspapers could block search engines from indexing certain material.

They also pointed out that Google had blocked information when it was shown to be criminal, such as child pornography sites.

"All the sentences (in other countries) under which Google has de-indexed pages are sentences which declared the content illegal," said Google lawyer Javier Aparicio, arguing that the material concerned in the Spanish cases was not illegal.

A ruling by the National Court could take weeks, even months.

The case is the latest legal wrangle involving Google. Google's street mapping program has been dogged by privacy concerns in Europe since its launch, and authorities across the world have mounted probes into the tech company's practices.

There has been an ongoing debate over online privacy and the so-called "right to be forgotten." European Union officials have been looking for ways to allow citizens to delete information about themselves that they do not wish to appear on the Internet.

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Green jobs continue to grow amid the economic downturn

Print   Email   Font ResizeBy Dana Hull

dhull@mercurynews.com

Posted: 01/18/2011 10:27:37 PM PSTUpdated: 01/19/2011 02:50:39 PM PST
California's unemployment rate has hovered around 12.4 percent for almost a year. But a new report released late Tuesday shows that green jobs continued to grow amid the downturn.

California's "Core Green Economy" had 174,000 jobs in January 2009, up from 169,000 in January 2008, according to the report by Next 10, a nonpartisan think tank founded by philanthropist and venture capitalist Noel Perry.

The Bay Area -- a hub for solar manufacturing and other clean energy generation -- continued to post the state's strongest green employment gains, adding 2,500 jobs -- half of the 5,000 statewide -- during the January 2008 to January 2009 time frame.

The bulk of the state's green jobs are in services, such as environmental consulting and green marketing. But manufacturing represents 26 percent of all green employment -- a significant share, given that manufacturing represents just 11 percent of the state's total economy.

The report, called "Many Shades of Green: Regional Distribution and Trends in California's Green Economy," is the second annual report for Next 10 prepared by Collaborative Economics of Mountain View.

The report's authors point to California's long history of forward-thinking public policy as driving much of the state's green job growth.

"We've had a renewable portfolio standard for utilities and energy efficiency requirements for buildings for years," said Perry, who started Next 10 in 2003. "The bar has

been raised here in California, and entrepreneurs and innovators are trying to reach that bar."

Job growth in the Bay Area can be found across cleantech sectors, particularly energy generation, carbon emissions monitoring, clean transportation and energy storage.

Picarro, a Sunnyvale company that makes scientific instruments to measure greenhouse gases such as carbon dioxide and methane, had fewer than 50 employees last year. The headcount is now 70, and the company expects to have well more than 100 by this time next year. Palo Alto's Tesla Motors, which had about 500 employees a year ago, has well more than 800 today.

"There's a lot of excitement about energy storage," said Doug Henton of Collaborative Economics. "It's the holy grail. Everyone is trying to figure out how to develop advanced batteries and fuel cells."

Tracking green job growth can be difficult because there are several different ways to define "green jobs" and the "green economy." Collaborative Economics defines green jobs and businesses as those that conserve energy and natural resources, reduce pollution, repurpose waste and provide alternatives to carbon-based energy sources. The firm scoured employment databases and then reached out to individual companies in an effort to quantify the actual number of jobs created.

Contact Dana Hull at 408-920-2706.

The 15 segments of the 'core green economy'1. Energy generation2. Energy efficiency3. Clean transportation4. Energy storage5. Air and environment6. Recycling and waste7. Water and wastewater8. Agriculture support9. Research and advocacy10. Business services11. Finance and investment12. Advanced materials13. Green building14. Manufacturing and
industrial support15. Energy infrastructureSource: Next 10 and Collaborative Economics. For a copy of the report, go to http://www.next10.org/.

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