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EBay Offers 3-Year Guidance—If Economy Recovers

At a time when so many companies are dispensing with meaningful guidance of any kind, eBay is taking the unusual step of offering guidance 3 years out. Not specific, quarter-to-quarter numbers, mind you, but signposts investors can use to gauge the progress of its turnaround strategy.

The numbers come from eBay CFO Bob Swan who took the stage with one major caveat: that the numbers are predicated on global economies returning to some sense of normalcy in 2010 and 2011."

To wit, eBay has already indicated that PayPal's performance is ahead of Wall Street predictions, one of the key reasons why shares enjoyed a 9 percent pop today.

But let's look at the upcoming years, a kind of back-to-the-future strategy for eBay since it was several years ago that former CEO Meg Whitman offered a grandiose, 5-year outlook. At that time, her outlook was aggressive, but the company was able to achieve the goals she spelled out. And it was impressive.

Today, the sign posts were unveiled and some analysts I talked to scratched their heads, wondering how in the world the company would meet them.

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Those sign posts include: 2009 will be a challenging year, and the company will face significant headwinds from a strengthening dollar, says Swan.

For PayPal, a $2.4 billion business becomes $4 billion to $5 billion business by 2011.

Fixed-price format generated $2 billion in revenue in 2008. eBay now anticipates "Buy It Now" will grow by double-digits over the next several years.

Marketplaces Classifieds (including stubhub) generated $1 billion last year, and by 2011 should double.

Auction revenue generated $2 billion in 2008, and this format has been declining, and will continue to. By 2011, auction revenue could be cut in half.

From Today's Tech Check Blog:

  • eBay Becomes Power Seller Of Itself

Ebay now says it will generate $10 billion to $12 billion in total revenue by 2011, even though its auction business will be fall significantly.

Still, it's a rosy outlook on many fronts and a clear indication that the eBay we know today will be much different far sooner than anyone anticipated.