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Mobile payment platforms could be key to eBay's continuing success

eBay posted some very positive first quarter earnings on Wednesday, and it looks like the online auction giant is going to continue to soar this year by pushing further on mobile platforms.
Written by Rachel King, Contributor

eBay posted some very positive first quarter earnings on Wednesday, and it looks like the online auction giant is going to continue to soar this year by pushing further on mobile platforms.

PayPal was cited as the major force behind the growing strength of mobile payments. eBay's president and chief executive officer John Donahoe said during the company's quarterly investor conference call:

Mobile payments also had strong traction and momentum for PayPal. Merchants everywhere are recognizing the growing importance of mobile commerce, and they're turning to PayPal Mobile Express Checkout to give their consumers the ability to buy merchandise using their mobile phones. While others are talking about mobile payments, PayPal is delivering real mobile payments volume. PayPal expects to almost triple TPV -- mobile TPV from $750 million last year to more than $2 billion in 2011.

But eBay execs acknowledge that PayPal and eBay's mobile app aren't enough by themselves to revive and continue to boost the company. eBay has acquired a number of start-up and small companies in the last year for their mobile technologies such as Milo, Red Laser and, most recently, the location-based WHERE service. Donahoe added:

We bought WHERE, which has local geo-targeting, this quarter, and what's fascinating is we talked at analyst day about growing synergies between eBay and PayPal, and we are seeing just that, that local commerce is being enabled by mobile commerce, and the fact that we have mobile payments is, and PayPal's capabilities, we think will further enable what Scott referred to as POS in -- at analyst day. With respect to how fast it will happen, I don't know. I think it's happening faster than any of us would've guessed six to 12 months ago, frankly driven by consumers and driven by consumer behavior with their mobile devices. So what we're focused on is ensuring that we have the best mobile commerce and mobile payments capabilities, which I think our volumes speak to.

Everyone is getting into the local deal business these days, and even though that bubble will inevitably burst, eBay could end up as one of the winners by buying the right companies and technologies to secure itself in the mobile shopping world. With the speed and escalating popularity of both smartphones and tablets, that's definitely where online shopping is headed.

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