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eBay Shares Shoot Higher

Updated from Jan. 24

Shares of eBay (EBAY - Get Report) climbed Thursday as investors applauded a fourth-quarter earnings report that beat Wall Street's expectations.

The stock was recently up $3.49, or 11.6%, to $33.49; Piper Jaffray upgraded the shares to market perform on Thursday, citing its expectations that eBay can continue delivering acceptable earnings results, depsite deteriorating fundamentals.

The online auction giant said Wednesday that earnings rose 24% to $346 million, or 25 cents a share.

Revenue grew 29% to $1.7 billion.

Excluding items, the company earned $431 million, or 31 cents a share, for the fourth quarter.

Analysts surveyed by Thomson/First Call forecast eBay to earn 28 cents a share on $1.67 billion in revenue for the fourth quarter.

Fears that eBay's core Marketplaces business was slowing beyond the company's control seem to be allayed for the time being. Marketplaces revenue totaled $1.2 billion for the fourth quarter, a growth rate of 24% over the $1 billion reported a year ago.

The closely watched metric of eBay's gross merchandise volume - the amount of merchandise sold over eBay -- also was up to $14.4 billion for the quarter, a 20% gain year over year.

eBay's efforts to reignite growth in its core business by tinkering with the various listings and incentives it offers seem to be paying off, CEO Meg Whitman said in an interview. "Our marketplace business had a strong quarter as a result of the efforts we undertook to rebalance it," said Whitman. "The conversion rates where higher and ASPs [average sale prices] were higher because we were able to improve the quality of listings, which led to a better buyer experience."
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