eBay Earnings Call Insights: Growth Guidance and Marketing Analysis
Gil Luria – Wedbush Securities: So your guidance your first quarter results and guidance for the second quarter puts you at the lower end of your longer-term growth guidance as well as this year’s full year growth guidance. Where do you expect the acceleration to come from for the balance of the year for the second half of the year and for the balance of your longer-term guidance?
Bob Swan – SVP, Finance & CFO: As you indicated in the first quarter I will just start with TPV in terms of commerce volumes. We grew by 19% in the quarter. As you know with the tougher comps of Easter and Leap Year on a year-over-year basis that weighed down on growth a little bit. So I have it a little bit higher than the 19% we reported. In our implied guidance for the first half for the year, roughly speaking we’re at 14% to 15% top line growth. Consistent with what we told you back in January, we have the second half growing a bit faster than the first half, so, in effect, no real change from where we were a couple of months ago. As we think about going into ’14 and ’15, the plans that we highlighted for you across all three of the businesses, in terms of protecting our existing core businesses, and expanding our served market, whether it’s mobile, whether it’s global, whether it’s local or whether it’s more engagement with consumers across all of our platforms, we expect that to be contributors to growth going forward. So far one quarter into our 12 quarter journey, we’re pretty much at the high end of what the expectations are that we laid out in January and on track for the full year and feel great about the next two year journey we shared with you a few weeks ago.
Gil Luria – Wedbush Securities: Then just a real quick follow-up, your user growth is accelerated for both PayPal and Marketplace. Is it that you’re adding more customers that take the time to ramp up their spending? Is it that you’re getting more customers in emerging markets where they don’t spend as much per customer? Is that part of the factor there?
Bob Swan – SVP, Finance & CFO: Yes. It’s been I mean, as you know, this has been the experience with accelerating user growth across both platforms. The newer users have a tendency to be less engaged at the early stages of their life cycle. Then our challenge obviously is once we get them on-board and back to either starting to use again or being new to eBay and PayPal is to engage with them in new and different ways to increase their engagement over time. So, that’s the more active user growth, in the early stages results in less engagement but our intentions are to increase that over time. In terms of where they’re coming from, it’s a little bit the same themes we’ve been sharing with you in the past. John highlighted this as well. New users coming from mobile, new users being reengaged and new users coming from emerging markets. those have been kind of the three buckets of increased active user growth that we’ve been experiencing, really for five quarters now…
John Donahoe – President & CEO: One of the things that I don’t think we fully understand yet is we know that mobile users are more engaged than non-mobile users and as you saw at our analyst day multi-screen users buy twice as much as non-multiscreen. So, we know mobile’s significantly increasing consumer engagement and we’re getting a greater number of new users from mobile. The market places had over 4 million new mobile users last year. Our new users to the Marketplace platform via mobile device and then the first corridor alone, we have a little under 3 million Company wide, so as those consumers go through that ramp up that Bob talked about, the first year to two years on our platforms, we’ll see I they ramp up engagement more quickly than has been the historical fact, but I think it’s a positive trend one way or another, as our mobile strength continues to be a source of advantage.
Heath Terry – Goldman Sachs: John, I was wondering, if you could give us an idea of about drove the marketing leverage in the quarter? To what extent is that due to more direct customer relationship that you’re gaining through mobile, particularly seeing that kind of leverage at the same time that you’re seeing the kind of growth that you are in users, what is being able to drive that user growth with less marketing mean longer-term for the margin opportunity in the business?
Bob Swan – SVP, Finance & CFO: Yes. I will take a stab. I think what we have experienced is a couple of things. As you know, we are always trying to optimize sales and marketing in terms of the different levers that we invest behind to drive traffic to our respective sites given that’s our largest component in overall costs. So we are constantly tweaking around the edges to optimize. I think, as John highlighted, new users coming through mobile devices have more of a tendency to come direct. So as we learn more about the new active users coming from mobile and how they engage that influences how we are spending money. At the same time in our efforts to optimize, I would also highlight that I do expect us to spend more as we go into the second quarter of the year, as we will continue to tweak and optimize. So while we had really good leverage in the quarter I dont expect it to be as good as we go into the second quarter of the year.
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