Why eBay’s recovery from its data breach will be slower in Europe

Market Realist

Why eBay could still make a comeback in the second half of 2014 (Part 3 of 7)

(Continued from Part 2)

Recovery in Europe is slower than the U.S. after the cyberattack on eBay

In the previous part of this series, we discussed the cyberattack on eBay (EBAY) that resulted in one of the worst data breaches in history. Only Adobe’s (ADBE) data breach last year resulted in more compromised records.

During eBay’s conference call to announce earnings, eBay’s management mentioned that its recovery is a bit slower in Europe than in the U.S. because the media in Europe is more privacy-sensitive. European legislators and regulators didn’t perceive the cyberattack on eBay well.

Lower revenue contribution from international markets for eBay in the last quarter

International markets are becoming important for Internet companies—especially as the U.S. market is getting saturated. Not only eBay, but also Google (GOOGL) and Facebook (FB) are increasingly earning more revenues from international markets.

As the chart above shows, the contribution from international markets has been increasing for eBay except in the last quarter. Although the decline was small, nonetheless it broke the trend of increasing revenue contribution from international markets for eBay.

Slower recovery in Europe offset by faster growth in Asia

The slower recovery in Europe after the cyberattack was definitely one of the reasons for lower revenue contribution from international markets for eBay. However, this slowness was offset by faster growth in Asia, which wasn’t affected much by the data breach. eBay mentioned that the Korean market did not show any slowdown.

Plus, eBay has taken a long-term view of the Indian e-Commerce market by increasing its investment. It recently made an investment in Snapdeal, which is one of the largest e-Commerce player in India. The long-term growth potential of Indian market is not only attracting eBay, but also Amazon (AMZN), which recently promised to make $2 billion investment in India over the next few years.

Continue to Part 4

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